Zoopla’s Rental Market Report: September 2025

Adapted from a Zoopla article by Richard Donnell, Executive Director – Research 15 September 2025

Rental market conditions are starting to normalise as supply and demand rebalance. The affordability of renting remains a key constraint on the pace of future rental inflation.

Key takeaways

• Rental market conditions are the softest for 5 years
• Demand is 24% lower than last year on the back of lower migration levels and improved mortgage availability for first-time buyers
• The number of homes for rent has expanded by almost a fifth as new investment increases and some homes for sale are listed as rentals
• Growth in supply is higher across all areas, less so in London
• UK rents for new lets are 2.4% higher - the lowest annual rate since 2020
• Rents in Leeds and Bristol post modest falls as individual markets adjust to shifting supply/demand dynamics
• Rents on track to be 2-3% higher over 2025

Key figures

• The average rent for new lets in the UK is £1,301 as of July 2025 (published in September 2025).
• Rents have risen 2.4% in the last year, the slowest rate of growth seen in 4 years.

Softest rental market for 5 years cools rental inflation

Rental market conditions are the weakest for 5 years. Letting agents are getting 24% fewer enquiries to rent homes than a year ago. This is the lowest level for the month of August since 2020 as migration levels fall and mortgage availability improves for first-time buyers. 

The number of homes for rent is steadily rising, at almost a fifth higher than a year ago. Homes are staying on the market for slightly longer as demand cools, with a current average of 16 days to find a tenant compared to 12 days in 2023 and 20 days pre-pandemic. 

More homes for rent and weaker demand have stalled the growth in rents, which are just 2.4% higher than in July 2024. This is the slowest pace of rental inflation for four years (July 2021) and less than half the annual rate recorded a year ago (5.1%). The average UK rent is £1,300 a month, with rents posting small falls in some markets as weaker demand and higher supply impact rent levels.

More investment by landlords is boosting rental supply

The average letting agent now has 19 homes available to rent, up from a low of just 14 in 2022. Over recent years, limited supply and strong demand pushed rents 36% higher since 2020, while house prices rose by around 20%. This has lifted returns for landlords, with average rental yields at 6% across the UK and rising above 7.5% in areas such as the North East and Scotland.

With yields improving and mortgage rates stabilising, more landlords are choosing to invest again. The number of new buy-to-let mortgages for home purchases rose by 60% in the year to the first quarter of 2025, supporting the growth in rental supply.

For renters, conditions are also shifting. Easier access to mortgages is helping more people become first-time buyers, freeing up homes for rent. And with record numbers of properties now for sale (some of which may be switched to rental if they don’t sell) the choice of rental homes is likely to continue improving.

In Q1 2025, there were changes to the way the affordability of mortgages is assessed, which delivered a 20% boost to borrowing capacity for first-time buyers (FTBs). This explains a 30% jump in FTB mortgages over the last year, which is one reason that the demand for renting is weakening, and more supply is being released.

Rental market outlook

Rental market conditions are starting to normalise after a frantic few years characterised by many renters chasing too few homes as landlords held back from investing, which pushed rents higher.

Supply and demand are coming back into balance, but the unaffordability of home ownership is trapping people in private renting, which is keeping rental demand above pre-pandemic levels.

It’s positive that the number of homes for rent is steadily recovering. However, we don’t expect a surge of new investment activity by landlords to accelerate the supply of homes for rent.

Rental inflation remains on track to be 3% over 2025. Encouraging new investment and growing the supply of homes for rent is the only long-term solution to easing the pressure on renters across Britain.

Download the full  Zoopla Rental Market Report: September 2025

Comments from Phil Clark

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