Demand also eases as more tenants become homebuyers
The gap between supply and demand in the private rented sector narrowed significantly in 2025, according to property portal Zoopla.
The firm’s latest Rental Market Report showed that annual rental growth slowed to 2.2% in October 2025, down from 3.3% a year earlier, with the average UK rent now at £1,320 per month – £30 higher than in 2024.
Demand for rented homes has fallen by around one-fifth over the past 12 months. Zoopla links this largely to a sharp drop in net migration and an improvement in mortgage affordability for first-time buyers, which has drawn more households into homeownership. Provisional estimates from the Office for National Statistics indicate that net migration declined by 78% between June 2023 and June 2025.
Zoopla expects around 20% more first-time buyers to complete purchases in 2025 compared with last year, many of whom are moving out of rented accommodation. This has released additional stock into the lettings market, contributing to a 15% year-on-year increase in the number of homes available to rent. The typical estate agency branch now lists 14 rental properties, up from a low of eight in 2022, although still below the pre-pandemic norm of 17.
Across the UK, homes are taking longer to let. Zoopla reports that the average property now remains on the market for 17 days before a tenancy is agreed. This is 18% longer than in 2024 and 42% longer than during the pandemic-era surge in rental demand.
Time to let has lengthened in every UK region and nation as market pressure has eased. Average marketing periods range from 14 days in Scotland to 19 days in the West Midlands. Zoopla suggests that these longer void periods will act as a brake on rent increases, pointing to more modest rental growth in 2026.
Regional patterns show stronger growth in lower-cost markets and weaker growth where rents are already high. At country and region level, rents are rising fastest in the North East, up 4.5%, followed by the North West, up 3.2%. London is seeing the slowest increase at 1.6%, with the West Midlands and Scotland both recording growth of 1.7%.
Conditions also vary at local market level. Some areas are now registering small falls in achieved rents for new lets. In the Birmingham postal area, average rents are 1.5% lower than a year ago, while in Dundee they are down by 1%. By contrast, the strongest growth is in Carlisle, where rents for new lets are up 8.1%, followed by Chester at 7.4% and Motherwell at 7%. Zoopla attributes these differences to how far rents have moved relative to local incomes, as well as to localised shifts in demand and supply.
“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.” said Richard Donnell (pictured right), executive director at Zoopla. “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% over 2026.”
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