The latest government figures show that average UK monthly private rents increased by 7.7%, to £1,332, in the 12 months to March.
This annual growth rate is down from 8.1% in the 12 months to February this year.
Average rents increased to £1,386 (7.8%) in England, £792 (8.9%) in Wales, and £1,001 (5.7%) in Scotland, in the 12 months to March 2025.
In England, private rents annual inflation was highest in the North East (9.4%) and lowest in Yorkshire and The Humber (4.6%), in the 12 months to March 2025. In Northern Ireland, average rents increased to £838 (8.2%) in the 12 months to January 2025.
Knight Frank’s head of residential research, Tom Bill, warns that the situation is likely to get worse for tenants. He says: “Upwards pressure on rents is likely to intensify as landlords leave the sector due to tougher green regulations, higher mortgage costs and the impact of the Renters Rights Bill, which makes it harder to regain possession of a property. Nobody would argue against protecting tenants from unscrupulous landlords, but the new legislation could be a lesson in the laws of unintended consequences.”
Greg Tsuman, lettings managing director at Martyn Gerrard Estate Agents, adds: “We’ve reached the upper limit of affordability for renters across the UK, and the gap between existing rents and newly agreed tenancies will likely continue to narrow. But for the millions relying on housing benefits, this slower pace of growth offers little relief. The gap between what tenants on benefits receive and what the market demands continues to grow. Since the pandemic, rents have increased by approximately 30%, creating a chasm between support levels and market reality.
“After a long-overdue uplift in Local Housing Allowance last April, rates are already frozen again until 2026, while rents keep climbing. Right now, just 2.5% of private rentals in England are affordable on housing benefit. Around 38% of private renters in England receive LHA support, and across the UK, more than 3.6 million households are now struggling to access an increasingly out-of-reach rental sector. The government’s plans to prevent income-based discrimination are welcome, but they ring hollow if renters on benefits are still effectively priced out.”
Jeremy Leaf, north London agent and a former RICS residential chairman, see it this way, “In our offices, we have certainly noticed some pushback from tenants reluctant to pay ever-increasing rents, which has obliged some landlords to reduce their aspirations despite supply remaining tight.”
Nathan Emerson, chief executive of Propertymark, comments, “the rental sector continues to see sizeable challenges from a magnitude of different angles currently. We continue to see a considerable mismatch between supply and demand with an average of 10 people wishing to rent each property currently available across the UK. In addition, we are seeing vast legislative changes that will affect how and if some landlords are able to continue operating within the sector. Throughout the last 20 years renting a property has become enormously more popular with people, and it’s vital there is targeted support and investment in the sector to keep pace with ever intensifying demand.”
How the Rental Market is Changing in 2025 and Beyond
With years of experience in the lettings market, I’ve seen first-hand how quickly the industry is evolving. As the rental market continues to change, our team is committed to helping landlords navigate these shifts and stay ahead of the curve. So, what’s driving these changes, and how can landlords prepare? Let’s dive into the key trends that are shaping the future of renters and how they impact property lettings in the UK in 2025.
1. The Rise of Remote and Hybrid Work
Since the pandemic, remote and hybrid work models have become the norm for many industries. As a result, renters are no longer tied to live in the places they work, or to areas with long commutes. In fact, a lot of remote workers say they would prefer to live somewhere different or even move to a rural area to take advantage of lower costs and more space.
What this means for landlords:
- Location matters less: Tenants are now more focused on lifestyle factors (like quiet neighbourhoods, access to nature, or better value for money) rather than being close to work.
- Home offices are essential: More renters are seeking properties that can easily accommodate a home office. If your property has an extra room or flexible space, make sure to highlight it in your listing.
- Longer leases: Many renters who are working remotely are opting for longer tenancies, as they’re looking for stability. This is a positive development for landlords as it reduces tenant turnover.
2. Hybrid Living: Blending Work and Life
As people continue to embrace flexible work arrangements, the concept of “hybrid living” has emerged. This refers to properties that are not only used as a home but also serve as a workspace, fitness area, and even a space for socialising.
What this means for landlords:
- Flexible living spaces: Properties with adaptable floor plans, such as open layouts or additional rooms that can function as offices or gyms, will be in higher demand.
- Community-focused amenities: Tenants are increasingly looking for buildings or neighbourhoods that offer shared amenities, such as co-working spaces, communal gardens, and social areas. If your property is in a building with these features, make sure to highlight them.
- Smart home technology: Smart thermostats, lighting, security systems, and high-speed internet will be sought after by tenants who need tech-enabled, efficient living spaces.
3. The Growing Demand for Sustainability
Environmental concerns are no longer a niche interest; they are a driving force in how people make decisions about where they live. More renters are looking for homes with green features, from energy-efficient appliances to renewable energy sources and sustainable materials.
What this means for landlords:
- Energy-efficient upgrades: As energy costs rise, tenants are increasingly looking for homes that can help them save on utility bills. Upgrading your property with energy-efficient appliances, double glazing, or solar panels will not only attract eco-conscious tenants but can also increase your property’s value.
- Sustainability certifications: If your property has a sustainability certification, such as an Energy Performance Certificate (EPC) rating of A or B, make sure to promote it. Properties with green credentials will be more appealing to the growing number of environmentally conscious renters.
4. Evolving Rental Regulations and Tenant Rights
As the rental market in the UK continues to evolve, ongoing changes in legislation are shaping how landlords and tenants interact. New regulations, aimed at improving affordability and tenant protection, are becoming more common. For instance, the government’s ongoing discussions around rent control, longer tenancy agreements, and tighter regulations on tenant eviction are likely to impact the lettings landscape as we move into 2025.
What this means for landlords:
- Staying informed: It’s crucial for landlords to keep up to date with changes in UK rental laws. The government is constantly reviewing tenant rights, rent controls, and eviction policies. For example, the Renters’ Rights Bill is expected to bring in significant changes, including the abolition of Section 21 evictions, which may impact how you manage tenancies. The Bill is expected to come into effect this summer.
- Adjusting rental strategies: While the Renters’ Rights Bill may limit the ability to raise rents or issue evictions, ensuring that your property is well-maintained, offers additional value, and is energy-efficient will help you attract and retain tenants, even in a more regulated market.
Conclusion: How Landlords Can Stay Ahead of the Curve
The future of renters is dynamic, and the rental market is evolving in exciting ways. To stay ahead, landlords need to be flexible and proactive, embracing the changes that are shaping the industry. By focusing on providing spaces that align with tenants’ needs—whether it’s remote work options, sustainability, or flexibility—I believe landlords can not only attract high-quality tenants but also future-proof their properties for years to come.
As we move into 2025 and beyond, remember that staying ahead of trends and being adaptable will give you the competitive edge in a rapidly changing market.