UK rental growth has eased to its slowest pace since 2021, but landlords remain in a strong position as low supply and high competition continue to dominate the private rental sector.
According to the latest Zoopla Rental Market Report, rents for new lets rose by just 2.8% in the 12 months to April 2025, down from 6.4% in 2024. This marks the lowest rate of rental growth since July 2021, with average rents now standing at £1,287 per month, an increase of £35 over the last year.
Regional slowdown masks localised hotspots
The report shows rental growth slowing across all regions, with Yorkshire and the Humber posting just 1.1% growth, down from 6.4% a year prior. Leeds, notably, recorded a -1.5% fall in average rents. Scotland also saw a sharp cooldown following the removal of rent controls in April, with growth dropping from 9.1% to 2.4%. Dundee rents actually fell -2.1%, reflecting affordability ceilings.
Yet in areas surrounding large cities, the story is different. Rents are rising quickly in Wigan, Chester, and Carlisle, each recording over 8% growth, as renters seek value just outside city centres. In London, rents have softened slightly in central zones but remain elevated overall at £2,175pcm.
Rents up 21% in three years while house prices lag
Over the past three years, rents have jumped 21%, outpacing house price growth which has increased just 4%. This equates to an extra £2,650 annually for the average renter since 2022 – the same increase seen in typical mortgage repayments over that time. Rental inflation has far exceeded earnings growth, placing pressure particularly on lower- to middle-income tenants.
Despite the recent slowdown in annual growth, the chronic undersupply of rental stock remains unresolved. Although rental supply has increased 17% year-on-year, it is still 20% below pre-pandemic levels. Private and institutional landlord investment remains subdued, limiting the number of homes entering the market.
Landlords still facing demand pressures despite slowdown
Commenting on the report, Richard Donnell, Executive Director at Zoopla, said: “Rents rising at their lowest level for four years will be welcome news for renters… But while demand for rented homes has been cooling, it remains well above pre-pandemic levels, sustaining competition.”
Adam Jennings, head of lettings at Chestertons, added: “Despite occasional market fluctuations, demand will likely always outweigh supply… based on 2025 market trends this summer may be the most competitive we have seen for many years.”
And Angharad Trueman, President of ARLA Propertymark, stressed that landlords are not to blame for high rents: “From the outside looking in, it may look as though landlords and their greed are at the heart of this problem, however, this is not the case. A significant number of landlords face increased costs across the board.”
She continued: “The bombardment and penalisation of landlords is pushing many to leave the market altogether… It’s crucial that support is available and incentives are introduced for investment moving forward in order to make private rented housing more affordable in the long term.”
A cooling market but strong fundamentals for landlords
While the rate of rental inflation has dipped, structural pressures – including population growth, low rental stock, and tighter borrowing rules for new homeowners – continue to support robust landlord returns.
Unless the government delivers meaningful incentives to boost supply, or dramatically scales social housing, landlords will remain key players in housing the nation’s workforce.
