## Competition for Rental Properties Eases Significantly

The UK rental market is experiencing a notable reduction in competition for available homes, reaching its lowest level in six years, according to Zoopla. Renters are now making an average of 4.8 enquiries per property, down from 6.5 enquiries a year earlier. This change reflects a 14% drop in demand alongside an 11% increase in the number of homes available to rent.

For landlords, this means a shift towards a more balanced market where properties take longer to let—currently averaging 20 days compared to 13 days at the market’s peak in 2022. While this may extend void periods, it also provides tenants with a wider selection and more time to find suitable accommodation.

## Slower Rent Growth Reflects Market Conditions

As demand softens and supply improves, rent increases for new lets have slowed to 1.9% over the past year, down from 2.9% previously. Richard Donnell, executive director at Zoopla, noted: “Market conditions for renters are the best they have been for six years. The rental market is moving back towards balance as demand cools and more homes become available to rent.”

However, Donnell also emphasised that supply remains well below pre-pandemic levels, highlighting the importance of increasing the number of rental homes to improve long-term affordability for tenants across the UK.

## Factors Behind Reduced Demand

Several factors have contributed to the easing demand in the rental sector. Improved mortgage conditions for first-time buyers have encouraged many households to transition from renting to home ownership. Official estimates indicate that net migration, which peaked at 944,000 in the year to March 2023, is expected to fall to 204,000 by June 2025. Since around three-quarters of first-time buyers previously rented, this reduction in migration and improved borrowing conditions have combined to reduce rental demand.

## Supply Increases as Some Sellers Opt to Rent

Alongside falling demand, some homeowners unable to sell their properties have chosen to place them on the rental market instead, contributing to the rise in supply. This shift has extended the average letting time, offering tenants more choice but requiring landlords to adjust expectations around vacancy periods.

## Regional Variations in Rent Growth

While the overall market shows signs of stabilising, rent increases remain uneven across the UK. More affordable northern cities have seen higher annual rent growth, with Liverpool at 4.6% and Newcastle at 4.5%. London’s rents grew by 1.7%, while cities like Bristol and Cambridge recorded much smaller increases of 0.8% and 0.1% respectively. Wales experienced a slowdown in rent growth from 4% last year to 2.3%.

Zoopla also reports that average earnings have risen faster than rents over the past 18 months, with the typical annual rent outside London now representing 33.5% of gross annual income for a single person. This is a slight improvement from the 35% ratio recorded in 2023, which was the highest in two decades.

## Industry Perspectives on Market Dynamics

Tom Bill, head of UK residential research at Knight Frank, commented: “More balance has returned across the UK but in the capital, where renting is twice as common, there is still a notable lack of supply in many areas that is pushing rents higher. Some landlords have already sold due to extra red tape and taxes while others are waiting to see how disruptive the Renters Rights Act is when it comes into force in May.”

Jeremy Leaf, a north London estate agent and former RICS residential chairman, highlighted the impact of upcoming legislation: “Conditions for letting property are favourable at present given the level of stock being sold and demand remaining strong in most areas, so many longer-term landlords are taking advantage. However, the reason why many are leaving the sector is the looming Renters’ Rights Act which is due to become law on 1 May. Landlords will then find regaining possession is likely to prove more difficult – they will have to wait over a year if they want to re-let to prevent back-door evictions, they won’t be able to increase the rent more than once a year and then subject to review, as well as stricter penalties, to name but a few changes.”

Gary Howorth, regional sales director at Chestertons, observed: “More first-time buyers have taken the step towards home ownership this year. In some parts of the UK, including some areas of London, this has weakened demand for rental properties. Remaining tenants looking to move now benefit from a larger pool of properties to choose from but we will likely see the market turn and demand go up again as we enter spring; a particularly busy time for tenants looking to move.”

Nathan Emerson, CEO of Propertymark, added: “The rental market continues to bring challenges that are tightly aligned to both fundamental economic pressures and new influence from updated legislation. We are witnessing some of the biggest changes in well over 30 years, with the introduction of additional consumer protections, plus a modified taxation framework for landlords. We currently have a rental landscape where demand for properties continues to outstrip available stock. Any reported uplift regarding additional rental properties being available must closely acknowledge the scenario of there still being intense pressure on supply.”

## What This Means for Landlords

The current market conditions suggest landlords may face longer void periods and slower rent growth, but also benefit from a more balanced rental market with less intense competition among tenants. However, the ongoing supply shortage and upcoming legislative changes, such as the Renters’ Rights Act, mean landlords should prepare for evolving challenges in property management and tenant relations.

Suggested internal link anchors
– rental market
– rent increases
– tenant demand
– Renters’ Rights Act
– letting times
– supply and demand
– first-time buyers
– landlord taxation
– property management
– rental property supply
– migration impact on housing
– regional rent variations

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/