The UK’s rental market has continued to slowdown, with average rents for new lettings rising by just 2.8% in the 12 months to April 2025, according to the latest rental data from Zoopla.
This marks the weakest annual increase in nearly four years, and is less than half the growth rate seen a year earlier. The average monthly rent now stands at £1,287, up £35 from April 2024.
All regions and nations in the UK have recorded weaker rental growth. Yorkshire and the Humber saw the sharpest decline, with growth dropping to 1.1%, compared to 6.4% last year. Cities such as Leeds (-1.5%), Bradford (1.4%), and Sheffield (1.9%) were also key contributors to this drop.
Rental inflation running at half the levels of 2024
In Scotland, the rate of growth has slowed rapidly from 9.1% to 2.4% due to affordability pressures and the removal of rent controls which limited how much rents can be increased within tenancies. In Dundee, rental growth has slowed to -2.1%, down from 5.8% in 2024.
In London, rents are posting modest falls in inner London areas including NW London (-0.2%) and WC London (-0.6%). Overall, rental growth stands at 1.5%, with average rents of £2,175pcm.
Rents have continued to increase quickly in more affordable areas adjacent to large cities such as Wigan (8.8%), Carlisle (8.8%) and Chester (8.2%). The number of postal areas where rents have risen at over eight percent a year has fallen from 52 a year ago to just five today.
Rents have increased five times faster than house prices over last three years
The sales and rental markets have diverged in recent years, particularly over the last three years, with rental inflation outpacing the growth in house prices.
Average UK rents for new tenancies are 21% higher since 2022, compared to just four per cent for house prices. The average monthly rent has increased by £219 over this time, broadly the same as the increase in average mortgage repayments.2 Average annual UK rents have increased by £2,650 over the last three years, from £12,800 to £15,450.
Rents have risen faster than house prices for five years
Rental growth has slowed but scarcity of homes available to rent continues
The slowdown in the rate of rental growth is a result of weaker rental demand and growing affordability pressures, rather than an increase in supply. Zoopla data shows rental demand is 16 per cent lower over the last year, but this remains more than 60% above pre-pandemic levels.3 Lower migration into the UK for work and study is a key factor with a 50% decline in long-term net migration in 2024.
Stability in mortgage rates and improved access to mortgage finance for first-time-buyers, most of whom are renters, is also a factor behind the moderation in levels of rental demand. Recent changes to how banks assess affordability will make it easier for renters on higher incomes to access home ownership, easing demand at the upper end of the rental market.
Despite weaker demand, renters are still facing a limited supply of homes for rent which is 20 per cent lower than pre-pandemic levels, despite being 17% higher than a year ago. Lower levels of new investment by private and corporate landlords is limiting growth in the private rental market. Looking to the remainder of 2025, UK rents remain on track to increase by three to four per cent over the rest of the year.
Richard Donnell, executive director of research at Zoopla, said: “Rents rising at their lowest level for four years will be welcome news for renters across the country. The average annual cost of renting is over £2,500 a year higher than three years ago, the same as the increase in average mortgage repayments for home owners.
“While demand for rented homes has been cooling, it remains well above pre-pandemic levels sustaining continued competition for rented homes and a steady upward pressure on rents. The pressures are particularly acute for lower to middle incomes with little hope of buying a home and where moving home can trigger much higher rental costs.
“The rental market desperately needs increased investment in rental supply across both the private and social housing sectors to boost choice and ease the cost of living pressures on the UK’s renters.”
