Average rents are at record levels across most of the UK. Here's what the latest market data means for landlords and what to expect in the year ahead.
The UK private rental market has entered 2025 with rents at or near record levels across most regions, demand continuing to outstrip supply in many areas, and a regulatory landscape in the middle of its most significant reform in a generation. Here's our reading of the market.
Headline rental growth
National average rents have grown by approximately 7-9% annually over the past two years, though growth rates are now moderating. The South East continues to see above-average growth driven by London spillover demand, housing undersupply and the ongoing high cost of homeownership.
Supply constraints driving rents
The private rented sector has seen a net reduction in landlord numbers since 2016, as tax changes and regulatory burden have prompted some smaller landlords to exit. This supply reduction is contributing to the upward pressure on rents and means tenants are competing harder for quality accommodation.
Demand remains structural
The underlying demand for rental housing isn't cyclical — it's structural. With homeownership rates falling among 25-34 year olds and the cost of a first home deposit remaining prohibitive for many, the proportion of households renting is expected to increase over the medium term.
Implications for landlords
For landlords in our operating areas, the market fundamentals remain favourable. Void periods are generally short, well-presented properties let quickly, and rents are sustainable against local incomes. The regulatory complexity is increasing but manageable with professional support.
Regional highlights
In Essex, c2c and Greater Anglia corridor towns continue to see strong demand from London overspill. South-east London is benefiting from Elizabeth line halo effects. Surrey's Gatwick and Guildford corridors remain premium rental markets with low vacancy rates.
Contact us to discuss what the current market means for your specific portfolio and how to maximise your returns.