Rental Market Update - June 2025
Charlie Panayi • June 16, 2025
The UK rental market is moving again, but this time, it’s not all heat. Rents are still rising, but at their slowest pace in years, and we’re finally seeing more stock come through. For landlords, this is the time to get smart, yes the demand is still high but: margins are tighter, tenant expectations are higher, and the days of just listing and waiting are over. Below, I break down the key stats and what they really mean, plus how I’m navigating it with my own portfolio.
Market Snapshot
- Average UK rent stands at £1,287 pcm. A small increase, 2.8% rise year-on-year, the slowest since July 2021
- Annual increases are forecast at 3–4% throughout 2025
Why the Slowdown?
- Mortgage Rates Stabilise
Easier access to mortgages (particularly for first-time buyers) has eased pressure on high-end renting. - Demand Slightly Eases
Inquiries are down -16%, though competition remains +60% above pre-COVID norms. - Supply Still Tight
Rentals available have increased +17% year-on-year, but remain -20% below 2019 levels.
Regional Performance
- North East: Rental surge leads at +5.2%.
- Yorkshire & Humber: Weakest growth of +1.1%.
- London: Slight uplift of +1.5%, though inner boroughs saw minor declines.
- Strong growth in commuter towns: such as Wigan, Carlisle, Chester all around +8–9%.
Regional Average Rents
North East:£950- £1,000 PCM.
Yorkshire & Humber: £800 - £900 PCM.
London: £2,175 PCM.
Commuter towns: £700 ‑ 850 PCM.
South East: £1350 - £1450 PCM.
South West: £1200 PCM.
Key Takeaways for Landlords & Investors
- Pressure on margins remains – strong cost inflation for landlords persists.
- Look outside major cities – better ROI opportunities in commuter markets.
- Focus on affordability – tenants on middle-to-lower incomes remain under pressure...retention and quality become crucial.
What’s Ahead
- Rental growth to remain flat: projected +3–4% this year
- First-time buyers moving in may soften rental demand at upper rent bands .
- Policy challenges ahead: rental reforms and EPC requirements could reduce available stock further.
My Take
While slower rent rises may feel like a plateau… they reflect a
return to normality after two years of exceptional inflation.
For landlords and property investors, the focus now needs to shift from chasing price growth to
building resilience, diversifying locations, enhancing tenant retention, and understanding your cost base.
Need help refining your portfolio strategy in these shifting markets?
Reach out. Happy to chat.
charlie@charliepanayi.com
Information generated from Zoopla, various national sources, own knowledge of areas and rightmove.
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