The latest Zoopla rental market report has been released, we have summarised the key takeaways below.
Slowing Rent Increases
-
Annual rent inflation for new leases has slowed to 3%, the lowest rate in 3.5 years, down from 7.4% the previous year.
-
The average monthly rent for new tenancies in the UK is now £1,284.
Shifts in Supply and Demand
-
Rental property supply has increased by 11% year-on-year, while demand has decreased by 17%.Despite these changes, competition remains high, with 12 prospective renters for each available property, double the pre-pandemic average.
Affordability Challenges
-
The annual cost of renting has risen by £3,000 over the past three years, reaching £15,400 on average.
-
Affordability constraints are now a significant factor limiting further rent increases.
Regional Variations
-
London has seen the lowest annual rent inflation at 1.1%, while Northern Ireland experienced a 9% increase.
-
More affordable cities l have recorded higher rent growth, with Blackburn for example experiencing a 10.1% rise.
Policy Implications
- Upcoming policy changes, such as the Renters’ Rights Bill and proposed energy efficiency standards, may deter new investment in rental properties, potentially limiting future supply.
- Zoopla forecasts that UK rents will increase by 3-4% over the course of 2025, with affordability remaining a critical factor influencing rental inflation.
It is clear that affordability is having an impact and putting huge pressure on those looking to rent properties in the South East of the country. Also clear is that the demand for good quality apartments and family homes in the Midlands and North of the country is still soaring with over 10 applicants per property and rents rising above inflation.
