The UK rental market has had a wild few years, and the latest data gives us a glimpse of where things stand now. While rents are still creeping up, it’s starting to feel like the market is cooling off—finally. But there’s a lot going on beneath the surface. Let’s break it down:

Rents Are Still Rising, But It’s Slowing Down

After a few years of pretty relentless rental increases, things are starting to ease off a bit. Growth has slowed to 5.4%, which is the lowest it’s been in nearly three years. But rents are still rising faster than wages, with the average rent now sitting at £1,245 a month. Even though it’s slower, it’s still £63 more expensive than last year. Add to that the fact that 21 people are still fighting over each rental property, and you can see why it still feels like a tight squeeze​.

Supply Is Getting Better, But It’s Still Tight

There are 20% more rental homes available compared to this time last year, but supply is still down 24% from where we were pre-pandemic. A lot of landlords are leaving the market too—over 12.5% of homes for sale in July used to be rentals. This makes things harder for renters, even as more homes come up for rent

Where You Are Matters

Not everywhere is feeling the slowdown equally. In London, rent growth has slowed to just 2.5%, but outside the capital, some smaller cities are still seeing double-digit increases. Places like Wolverhampton (12%) and Oldham (11%) are seeing rents skyrocket because people are getting pushed out of bigger cities to find cheaper housing​

What’s Next?

So, what does the future hold? It's likely rental growth will slow even more, down to around 3-4% by the end of 2024. But don’t expect rent prices to drop dramatically anytime soon. The imbalance between supply and demand is set to continue into 2025, meaning there’ll still be pressure on rents, especially in affordable areas

The UK rental market is in a weird place right now. While we’re past the worst of the rental price hikes, things are still far from balanced. With landlords selling up and rental stock still below where it should be, both renters and landlords have some challenging times ahead. Buckle up—2024-2025 is likely to keep us on our toes.

Data generated from Zoopla, Onthemarket and personal knowledge of current market