The UK rental market is experiencing continued turbulence as 2025 progresses, with high demand, limited supply, and rising rents continuing to define the landscape for both landlords and tenants.
Recent data from leading property portals shows average UK rents have climbed again this spring, although the pace of growth has eased compared to the surges seen in 2022 and 2023. While London still commands the highest rents, cities such as Manchester, Newcastle, and Birmingham have seen some of the fastest growth year-on-year, driven by returning students, young professionals, and a reduction in available housing.
A major factor shaping the current rental market is the growing gap between supply and demand. Many landlords have exited the sector in recent years, citing rising mortgage costs, taxation changes, and the impact of upcoming legislation such as the Renters (Reform) Bill. This has left fewer homes available to rent, even as demand remains strong, particularly from prospective buyers who have been priced out of homeownership by high interest rates and tighter affordability.
As a result, tenants are facing increasingly fierce competition for rental properties, especially in high-demand urban areas. In many locations, it’s now common for newly listed properties to receive dozens of enquiries within the first few hours, leading to bidding wars and offers above the asking rent. Some tenants are even offering up to six or twelve months of rent upfront in a bid to secure accommodation.
Despite this competitive environment, rent increases have begun to slow in some parts of the country. After a period of rapid growth, affordability is now starting to act as a natural ceiling. Figures from Zoopla show that annual rental growth has cooled to 6.6% as of April, down from more than 12% at its peak last year. Nonetheless, rents remain significantly higher than pre-pandemic levels, placing continued pressure on tenants’ finances.
Landlords, meanwhile, are navigating an increasingly complex environment. The looming Renters (Reform) Bill, expected to be implemented later this year, will bring sweeping changes, including the end of Section 21 ‘no fault’ evictions and stricter standards for rental homes. Some landlords are choosing to invest in improvements to meet rising tenant expectations, while others are turning to professional management services to stay on top of legal and regulatory obligations.
Looking ahead, market analysts expect rents to continue rising throughout 2025, though likely at a slower and more sustainable rate. With the supply of rental housing unlikely to increase significantly in the short term, the pressure on tenants is set to persist. However, potential reductions in interest rates later this year may bring some relief, both for landlords with mortgage commitments and for buyers hoping to return to the sales market.
At Spartan Property Estate Agents, we’re monitoring these developments closely and remain committed to supporting landlords and tenants alike through this challenging period. Whether you’re letting a property, searching for a new home, or simply looking for guidance, our experienced team is here to help you make informed decisions in a changing market.