UK Lettings Market June 2025
UK lettings market reports for June show a rise in private rents but indicate that the market is beginning to cool. The average monthly private rent increased by 7.0%, to £1,339, in the 12 months to May 2025, according to the latest lettings market index report from the Office for National Statistics* (ONS), published on 18 June 2025. Average rents rose to £1,394 (7.1%) in England, £799 (8.5%) in Wales, and £999 (4.5%) in Scotland over the same period.
According to the HomeLet** Rental Index, the average rent price in the UK for May 2025 was £1,307, reflecting a 0.7% increase from April.
“The four-year surge in UK rental prices has ended,” comments Zoopla*** in its index published on 11 June. The average UK rent for newly advertised properties increased by 2.8% in the 12 months to April 2025. According to Zoopla, the average monthly UK rent in April this year was £1,287.
Rental Growth
UK lettings market data from various sources confirms that UK rental growth is slowing down. This trend is expected to continue in 2025, with slower growth in larger cities and faster increases in more affordable areas. Big cities are leading the slowdown in rental inflation as new ‘Build to Rent’ developments complete. Affordability pressures are still persistent, and access to mortgage finance improves – notes Zoopla in its latest letting market report. It also highlights that UK rents have risen faster than house prices over the past five years.
London Rentals
In London, the average year-on-year rent rose by 1.5%, reaching £2,175. (Zoopla). However, specific inner London areas, namely NW London and WC London, saw marginal decreases of 0.2% and 0.6%, respectively.
Rental Demand
Reduced immigration and a stronger market for first-time buyers have contributed to a 17% decrease in rental demand compared to last year. Although the number of UK homes available for rent has increased by 11%, there are still 12 prospective renters competing for each available property, double the pre-pandemic average.
Outlook
The UK lettings market is poised for significant shifts, primarily driven by impending rental reforms. These include the proposed Renters’ Rights Bill and new energy efficiency requirements for rental properties, both of which are expected to influence investor sentiment and the supply of rental housing.
Landlords and prospective investors may face heightened regulatory burdens and increased operational costs, potentially diminishing the attractiveness of buy-to-let ventures. This, in turn, could constrain the growth of new rental supply entering the market. Stricter energy efficiency requirements may also deter some existing landlords from remaining in the sector or discourage new entrants, further limiting rental supply and placing upward pressure on rental prices.
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* ONS methodology tracks both new and existing tenancies.
** HomeLet methodology is based on newly agreed tenancies.
*** Zoopla methodology tracks newly advertised rentals.