UK rents are climbing at their slowest pace in four years as more homes return to the lettings market and tenant demand cools, according to Zoopla. Average monthly rents stand at £1,300—just £30 higher than a year ago—while agents are receiving 24% fewer tenant enquiries than in early 2024.
More homes to rent across the regions
Zoopla’s latest data show the number of available rental homes has jumped 19% year on year, with the typical letting agent now marketing 19 properties compared with just 14 in 2022. Supply growth is strongest in the South West and East Midlands, up 36% and 31% respectively. Some homeowners unable to sell are choosing to let instead, further boosting stock.
Richard Donnell, Zoopla’s executive director, said: “Lower migration and better mortgage availability for first-time buyers are easing the competition for rented homes. The affordability of renting remains a key constraint on the pace of future rental inflation and we expect rents to be 3% higher by the end of the year at an average of £1,320 a month.”
First-time buyers shift demand
Stronger mortgage affordability assessments introduced in early 2025 have increased first-time buyers’ borrowing power by around 20%, leading to a 30% jump in first-time buyer mortgages over the past year. As more renters purchase their first homes, they free up former rental properties, easing the supply crunch that has driven rent hikes since 2020.
Opportunity and caution for buy-to-let investors
Despite easing rent growth, a 36% rise in average UK rents since 2020 continues to make buy-to-let attractive. UK Finance data show new loans for rental purchases are up 60% in the past year, suggesting investors are re-entering the market. “After several years of double-digit rent increases, a period of slower growth isn’t a crisis—it’s a sign of a maturing market,” said Sarah Mitchell, a Midlands landlord expanding her portfolio while mortgage rates remain steady.
A cooling rental market isn’t necessarily bad news for investors. More balanced supply and steadier rent growth can bring stability to yields and reduce tenant turnover. For landlords, the key question is whether today’s moderation signals a sustainable equilibrium, or if new regulations, from EPC upgrades to the Renters’ Rights Bill, will tilt the market once again.
