As we step into 2025, the UK rental market remains a key area of interest for both tenants and landlords. From demand trends to rent increases, here’s what experts predict for the upcoming year.
1. Rental Demand is Balancing Out
In 2024, rental demand saw a significant decline. The average number of inquiries per property dropped from 19 to 11. However, this figure is still nearly double the pre-pandemic average of six inquiries per property in 2019. With a 7% increase in the supply of rental homes, 2025 is expected to bring a more balanced and calmer market compared to recent years.
2. Slower Rent Increases
After years of rapid rent growth, 2024 saw a more moderate increase. Average rents outside London reached £1,339 per month (+4.5% YoY), while in London, rents rose by just 2%. Predictions for 2025 indicate a steady 3% rise in advertised rents both inside and outside London, signaling a return to more sustainable growth rates.
3. Affordability Challenges
Rent prices have surged by 40% over the past five years, while wages have only increased by 28%. This gap has pushed many renters to their “affordability ceiling.” Currently, 26% of rental properties have reduced their asking rents, compared to 23% during the same period in 2023.
4. A Return to City-Centre Living
London’s rental market is experiencing a resurgence in demand for city-centre living, as companies call employees back to the office. This trend is expected to drive higher rent increases in urban areas, making central London a key area to watch in 2025.
5. Tips for Renting in 2025
With competition in the rental market still fierce, here are five tips to help you secure the home you want:
Prepare your references in advance.
Be flexible with your move-in dates.
Stay updated on new listings.
Act quickly when you find a suitable property.
Explore areas with higher supply for better options.
The rental market in 2025 is expected to stabilize, offering a slower pace of rent increases. However, affordability and competition will remain challenges for tenants. By staying informed and proactive in your search, you can increase your chances of finding the right home in this dynamic market.
