UK’s renters are under less pressure, with the lowest level of competition for rented homes in six years, says Zoopla.
The result is rents for new lets increasing by just 1.9% over the last year.
Demand amongst renters has fallen by 14% over the last year while the number of homes available for rent has increased by 11% over the same period.
The result has been less competition between renters with 4.8 enquiries per property, down from 6.5 a year ago.
This is clear evidence of the rental market becoming more balanced after a peak in competition for rented homes seen in 2022 and 2023.
Improving conditions in the mortgage market for first time buyers and a continued decline in migration into the UK for work and study are the primary drivers of lower demand for rented homes.
The latest ONS estimates reveal net migration into the UK peaked at 944,000 people in the year to March 2023 and this has slowed to 204,000 in the year to June 2025.
With three-quarters of first time buyers coming out of the rental market, more favourable conditions in the mortgage market have boosted first time buyer numbers, reducing demand for rented homes.
This has helped to free up the number of homes for rent which explains the growth in supply.
However, the shift is not purely down to first-time buyers, with this increase also stemming from would-be sellers deciding to place their properties into the rental market – particularly if they are struggling to sell.
The changing dynamics of supply and demand also mean that homes are taking longer to rent. On average, finding a tenant now takes 20 days – a week longer than 2022’s peak of 13 days.
For renters, this provides more choice of properties and more room for negotiation
Less competition for rented homes has slowed rental growth for new lets to 1.9% over the last year, down from 2.9% a year ago.
Average earnings have continued to increase at a faster rate than rents for the last 18 months which is also helping to improve affordability for renters.
The annual rent for the average property outside of London is now 33.5% of the gross annual income for a single person.
This is an improvement from 2023 where the ratio was highest in 20 years at 35%.
Rental growth remains stronger in the more affordable markets in Northern England and Scotland, with certain cities seeing increases of 3%-4%+, as demonstrated by Liverpool and Newcastle recording growth of 4.6% and 4.5% respectively.
In contrast, several cities across the Midlands and Southern regions are seeing lower or even negative price growth, with Bristol growing at 0.8%, Cambridge at just 0.1%, and the likes of Birmingham (-0.7%) and Nottingham (-0.8%) actually falling.
In London, rents are growing at a relatively low 1.7%, with the average rent now sitting at £2,187.
The data also reveals bigger fluctuations by region in terms of price growth, with Wales seeing a drop of -1.7% YoY from 4% to 2.3%, while the West Midlands region has fluctuated even more from 3.8% last year to 0.3%.
This low growth reflects weaker rental demand in these areas, but is predicted to be short term, as local markets adjust to more balanced conditions.
This article is taken from Landlord Today