Rental demand drops to six-year low
Rental demand drops to six-year low as supply improves and rental growth slows to 2.2 per cent reports Zoopla
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Demand for rented homes has fallen by a fifth over the last year and is the lowest for six years.
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There are 15% more homes for rent than last year, boosting choice for renters
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UK rents just 2.2 per cent higher over the last 12 months (vs 3.3 per cent a year ago)
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The time to rent a property has increased to 17 days – the highest since 2019
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Rents are rising faster in more affordable areas including Carlisle (8.1 per cent), Chester (7.4 per cent) and Motherwell (7 per cent) where there is headroom for growth
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Zoopla expects rents for new lets to rise by 2.5 per cent over 2026
The latest Rental Market Report from Zoopla, one of the UK’s leading property websites, reveals that the imbalance between supply and demand for rented homes has narrowed sharply over 2025. Rental growth has slowed to 2.2 per cent at the end of October 2025, down from 3.3 per cent a year earlier. Average UK rents stand at £1,320 per month, £30 up on last year.
Demand for rented homes down by a fifth
Demand for rented homes is down by a fifth (20 per cent) over the last year.2 The drop in demand reflects two main factors: a sharp decline in net migration, which ONS provisional estimates3 say has fallen by 78 per cent between June 2023 and June 2025, and improved mortgage affordability for first-time buyers which has boosted demand to buy homes.
The market is on track for 20 per cent more first time buyers purchasing homes over 2025 and many of these buyers come from the rental market which releases more homes for rent. This is one reason why there are 15 per cent more homes to rent compared to a year ago. The average estate agency branch now has 14 homes for rent. This is up from a low of just 8 in 2022, though still lower than the pre-pandemic average of 17.
Chart 1: Demand for rented homes falls
Homes taking longer to let
The time it takes for a property to rent is a key barometer of rental market health and indicates how supply and demand are shifting in real time. The time to rent has been increasing, with the average home staying on the market for 17 days before being rented. This is almost a fifth higher (18 per cent) than a year ago and 42 per cent longer than during the demand boom for rented homes during the pandemic.
The time to rent has increased across all regions and countries of the UK as the pressure on the rental market has cooled, with the average ranging from 14 days in Scotland to 19 in the West Midlands. Longer times to let will limit how much rents can be increased, which means lower levels of rental growth over 2026.
Chart 2: Time to rent (days), UK – November average each year
Rents rising fastest in cheaper markets
Rental inflation across the regions and countries of Great Britain has slowed over the last year. Overall, rental growth is strongest in lower-value markets where affordability provides more headroom for rental increases, while higher-value areas are seeing slower growth as stretched affordability limits further rent rises.
At a country and region level, rents are rising fastest in the North East (4.5 per cent) and North West (3.2 per cent), while growth is weakest in London (1.6 per cent) and in the West Midlands and Scotland (both 1.7 per cent).
The changes in supply and demand do not play out equally across the country. Some local markets are registering a decline in rents for new lets, with rents lower than a year ago in the Birmingham (-1.5 per cent) and Dundee (-1 per cent) postal areas. In contrast, rents are rising fastest in Carlisle (8.1 per cent), Chester (7.4 per cent) and Motherwell (7 per cent). These differences reflect the affordability of rents relative to local incomes, as well as demand and supply.
Commenting on the report, Richard Donnell, Executive Director at Zoopla said: “The rental market has made a big stride back towards normality over 2025 after a prolonged period of sky-high demand and a lack of homes for rent. This is welcome relief for renters who can expect to see a greater choice of homes, slower rent increases and a less competitive market. However, the high costs of buying a home remain a barrier to many renters, which will support demand for renting over 2026. While there are signs that landlords are buying homes again, we do not expect a big increase in supply, meaning rents are set to increase by 2.5 per cent over 2026.”
Adam Jennings, head of lettings at Chestertons, said: “Since the Budget, more aspiring first-time buyers are taking the necessary steps towards homeownership, which is further boosted by the current choice of mortgage deals. This has somewhat dampened demand for rental properties in some parts of the country and could result in rent levels remaining fairly balanced in 2026. That being said, if the sales market improves, some landlords may sell rental properties they had previously held back, potentially reducing rental supply. Combined with the ongoing strong tenant demand, particularly in London, this could cause rents to resume their upward trajectory.”
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