Key figures
The average rent for new lets in the UK is £1,284 as of December 2024 (published in March 2025).
Rents have risen 3% in the last year, the slowest rate of growth seen in 3.5 years.
December 2024 | October 2024 | July 2024 | |
Average rent (new lets only) | £1,284 | £1,270 | £1,245 |
Annual rental growth | +3% | +3.9% | +5.4% |
Rental market becoming more balanced
Rental market conditions are steadily improving after 3 years of chronic undersupply and excess demand. There remains a mismatch in supply and demand, which is not going to rebalance anytime soon, meaning a continued upward pressure on rents.
Rents are increasing at their lowest rate for 3.5 years. However, this has more to do with worsening rental affordability than an improvement in the supply of homes for rent.
Data from the Office for National Statistics reveals living costs for private renters rose faster than any other group in 2024.
The average letting agent now has 13 homes for rent. This has risen from a low of 10 in 2023 but is still 22% below the pre-pandemic average.
The private rental market needs more supply to boost choice and to help renters on lower-to-middle incomes who have struggled to keep pace with the 24% increase in rents for new lets seen over the last 3 years.
Looking for a new rental home?
Search for a new rental home by location, price, number of bedrooms and more.
Rental Reform and other policies limit supply growth
The private rental market in England is facing some major policy changes, which are likely to limit new investment and growth in the stock of rented homes over the next few years.
This follows on from tax changes and higher mortgage rates, which have caused many landlords to exit, keeping rental stock levels static at around 5.5m since 2016.
The new Renters’ Rights Bill is likely to come into force later in 2025, resetting the relationship between renters and landlords, but also increasing the complexity and cost of being a landlord. Investment in new supply will be lower as landlords assess the impact.
In addition, the government is consulting on the need for private rented homes to have an energy rating of ‘A’, ‘B’ or ‘C’ before they can be let out from 2028.
Almost half (45%) of rented homes require investment to get from a D rating to a C rating.
Nearly 1 in 5 (16%) of private rented homes are currently ‘E’, ‘F’ or ‘G’ rated, which means they could be more at risk of being lost from the rental market, eroding available supply.
Know your budget in 2 minutes
Discover your maximum borrowing power
Establish your monthly repayments
See homes you know you can afford
With no fees and no credit checks on your finances.
UK rental inflation lowest for 3.5 years
The average monthly UK rent is now £1,284, up 3% from this time last year.
This is the lowest rate of growth seen for 3.5 years - and less than half the rate of inflation we were seeing a year ago (7.3%) as the supply/demand imbalance narrows.
There has been a modest 11% increase in the number of homes available for rent over the last year, while rental demand is down by almost a fifth (17%) compared to a year ago.
The mismatch between supply and demand remains an issue, with 12 renters currently chasing each home for rent. This is almost half the level of competition for rented homes recorded between 2022 and 2024 (when rental demand was at its strongest), but is still double the levels seen before the pandemic.
Demand slows as rental supply increases
Rental demand has cooled across all regions and countries of the UK over the last year. This is largely a result of lower levels of immigration for work and study, as well as greater first-time buyer demand, as most first-time buyers are coming from the rental market.
The average annual cost of renting has risen by £3,000 over the last 3 years, and these growing rental costs are likely to be suppressing demand for new lets.
Higher rental costs encourage renters to stay put for longer, which also reduces available supply.
The number of homes for rent has increased in all areas of the UK, except in the West Midlands, where supply is 10% lower than last year.
The North-East and Scotland have seen the greatest growth in the number of homes available for rent, with supply up 23% and 29% respectively in these areas.
And while rising supply is welcome news for renters, the number of rental homes available remains below pre-pandemic levels across all areas, except for the East Midlands.
Rental inflation ranges from a low of 1.1% in London to 6.3% in the North East and 9% in Northern Ireland.
In addition to London, rental inflation has slowed rapidly in Scotland and the East Midlands over the last year, due to increases in the number of homes available for rent.
Rents rising faster in more affordable cities
Rents are now rising slower than average earnings (up 6% in the past year) across most cities, which will be welcome news for renters who have faced steep increases over the last 3 years.
At a city level, annual rental inflation ranges from -1.2% in Nottingham and 0.4% in Leeds to 6.2% in Newcastle, highlighting how localised changes in supply and demand can shape the trajectory of rental costs.
Rising levels of rental supply in Nottingham are now impacting rent levels.
Outlook for rental costs in 2025
We expect demand for rented homes to continue to exceed available supply in 2025, but to a lesser extent than we’ve seen in the recent past.
The overall stock of rented homes is unlikely to increase in size in the coming years, due to policy changes impacting profit margins and operating complexities for landlords.
Lower levels of net migration have helped to moderate rental demand: net migration in 2024 was 728,000, which is down 20% from 906,000 in 2023-24.
This decline is expected to continue into 2025 due to stricter visa policies, which were introduced in early 2024, alongside increasing levels of emigration, particularly among international students.
Affordability remains the main constraint on rental inflation, and is the primary factor behind rents rising at their lowest rate since August 2021.
However, there is scope for rents to rise at an above average rate in areas where renting remains more affordable, including areas adjacent to big cities. Rents are rising fastest in Blackburn (10%), Stoke (9.6%) and Rochdale (9.3%), for example.
We expect rents to increase by 3-4% over 2025 as slower growth in large cities is offset by faster growth in more affordable markets. Minimising the negative impacts of policy change on supply is essential to help most renters, who are on low to middle incomes.
Download the Zoopla Rental Market Report: March 2025
Previous Rental Market Reports
See more news from our Rental Market Report
Our Rental Market Index is a repeat transaction index, based on asking rents and adjusted to reflect achieved rents. The index is designed to accurately track the change in rental pricing for UK housing.