Zoopla says a sharp drop in net migration is one of the main reasons for a stabilising rental market with the supply-demand imbalance easing throughout 2025.
The portal says rental growth slowed to 2.2 per cent at the end of October 2025, down from 3.3 per cent a year earlier. Average UK rents stand at £1,320 per month, £30 up on last year and demand for rented homes is down by a fifth (20 per cent) over the last year.
The portal adds that the drop in demand reflects both a sharp decline in net migration, which government provisional estimates say has fallen by 78 per cent between June 2023 and June 2025, and improved mortgage affordability for first-time buyers which has boosted demand to buy homes.
The market is on track for 20 per cent more first time buyers purchasing homes over 2025 and many of these buyers come from the rental market which releases more homes for rent. This is one reason why there are 15 per cent more homes to rent compared to a year ago. The average estate agency branch now has 14 homes for rent. This is up from a low of just eight in 2022, though still lower than the pre-pandemic average of 17.
The time it takes for a property to rent is a key barometer of rental market health and indicates how supply and demand are shifting in real time. The time to rent has been increasing, with the average home staying on the market for 17 days before being rented. This is almost a fifth higher (18 per cent) than a year ago and 42 per cent longer than during the demand boom for rented homes during the pandemic.
The time to rent has increased across all regions and countries of the UK as the pressure on the rental market has cooled, with the average ranging from 14 days in Scotland to 19 in the West Midlands. Longer times to let will limit how much rents can be increased, which means lower levels of rental growth over 2026.
Rental inflation across the regions and countries of Great Britain has slowed over the last year. Overall, rental growth is strongest in lower-value markets where affordability provides more headroom for rental increases, while higher-value areas are seeing slower growth as stretched affordability limits further rent rises.
At a country and region level, rents are rising fastest in the North East (4.5 per cent) and North West (3.2 per cent), while growth is weakest in London (1.6 per cent) and in the West Midlands and Scotland (both 1.7 per cent).
The changes in supply and demand do not play out equally across the country. Some local markets are registering a decline in rents for new lets, with rents lower than a year ago in the Birmingham (-1.5 per cent) and Dundee (-1 per cent) postal areas. In contrast, rents are rising fastest in Carlisle (8.1 per cent), Chester (7.4 per cent) and Motherwell (7 per cent). These differences reflect the affordability of rents relative to local incomes, as well as demand and supply.
Richard Donnell – executive director at Zoopla – says: “The rental market has made a big stride back towards normality over 2025 after a prolonged period of sky-high demand and a lack of homes for rent. This is welcome relief for renters who can expect to see a greater choice of homes, slower rent increases and a less competitive market. However, the high costs of buying a home remain a barrier to many renters, which will support demand for renting over 2026. While there are signs that landlords are buying homes again, we do not expect a big increase in supply, meaning rents are set to increase by 2.5 per cent over 2026.”
This article is taken from Landlord Today