Date Published 12 December 2025
Zoopla reports that the UK rental market is moving back towards more balanced conditions, with a sharp drop in net migration acting as a key driver behind easing demand throughout 2025. According to the portal, annual rental growth slowed to 2.2% at the end of October 2025, down from 3.3% a year earlier. Average rents now stand at £1,320 per month, just £30 higher than last year, while demand for rented homes has fallen by 20% over the past 12 months.
The fall in demand is attributed to two major trends:
• A steep decline in net migration, with provisional government estimates showing a 78% drop between June 2023 and June 2025, and
• Improved mortgage affordability, encouraging more first-time buyers to leave the rental sector and purchase homes.
Zoopla says the market is on track for 20% more first-time buyer purchases in 2025, many of whom are exiting rented accommodation. This shift alone has released more stock back to the market, contributing to a 15% increase in homes available to rent compared with last year. The average estate agency branch now lists 14 homes to rent, up from a low of eight in 2022, though still below the pre-pandemic norm of 17.
Slower Lettings Pace Signals Softer Conditions for Landlords
The pace at which rental homes are being let continues to lengthen—a key indicator of easing market pressure. Properties now take an average of 17 days to let, up 18% on last year and 42% longer than during the peak pandemic rental surge. Every UK region has seen time-to-let increase, ranging from 14 days in Scotland to 19 days in the West Midlands. For landlords, this means reduced upward pressure on rents and a market where pricing strategy and property presentation will matter more than in recent years. Zoopla expects this trend to contribute to lower rental growth through 2026.
Regional Variations Highlight a Polarised Market
Rental inflation over the past year shows significant regional variation:
Strongest growth:
• North East: 4.5%
• North West: 3.2%
Weakest growth:
• London: 1.6%
• West Midlands: 1.7%
• Scotland: 1.7%
Local markets also show increasing divergence. Some areas are already registering annual rent declines for new lets, including:
• Birmingham: –1.5%
• Dundee: –1.0%
Meanwhile, rents continue to rise sharply in more affordable markets such as:
• Carlisle: 8.1%
• Chester: 7.4%
• Motherwell: 7.0%
These contrasts reflect the interplay between local incomes, affordability constraints, and the pace of new supply returning to each market.
Zoopla's executive director, Richard Donnell, notes that 2025 has seen the rental market make 'a big stride back towards normality' after several years of extreme demand and limited supply. He highlights that renters can expect more choice, slower rent rises, and less competition. However, he also acknowledges that high buying costs will continue to keep many households in the rental sector, sustaining demand into 2026. Zoopla forecasts rents to rise by around 2.5% next year, with no significant increase in supply expected despite signs of rising landlord purchases.
Whether you are expanding your portfolio, reviewing rental strategies, or considering a sale, Adams Estates can help you navigate today's more nuanced and fast-changing market. With more than two decades of experience in lettings and sales, we provide clear, professional advice tailored to your investment goals.
