The UK lettings market continues to shift, and for agents, understanding these movements is key to making informed decisions for both landlords and tenants. From regional rental trends to upcoming legislation, here’s a snapshot of where things stand midway through 2025, and what to keep in mind as you plan ahead.

Rental Growth Remains High But Is Slowing

Rental prices are still rising year-on-year, but the pace is beginning to ease. In April 2025, the average UK rent increased by 7.4% compared to the same time last year, down slightly from the 7.7% growth recorded in March.

Regional highlights:

• North East England leads the way with the highest annual rent inflation at 9.4%
• London has cooled slightly to 8.4%, from 9.1% in March
• Yorkshire and the Humber recorded the lowest increase, at 4.0%

Takeaway: Affordability is starting to cap rental growth in many areas, with tenants exploring lower-cost regions or smaller homes. Pricing strategies and property positioning will matter more than ever this year.

House Prices Rising, Especially in the North

House prices are also seeing notable growth. In the 12 months to March 2025, the average UK house price rose by 6.4%, up from 5.5% in February.

• North East England again saw the highest rise, at 14.3%
• London continues to underperform on price growth, with just 0.8%

For investor-focused landlords, this could mean more attention on northern cities for higher yield opportunities, and for agents, potential conversations around remortgaging or portfolio expansion.

Supply Remains Tight, and Landlord Sentiment Is Mixed

Lettings supply continues to be constrained. The number of homes available to rent is down 24% compared to pre-pandemic levels. At the same time, landlords are facing increased regulation, rising costs, and ongoing tax pressures.

Some are choosing to exit the market altogether, particularly accidental or smaller-scale landlords, while others are doubling down and focusing on maximising returns.

Your role as a local agent is more valuable than ever, both in helping landlords navigate uncertainty and in ensuring properties are marketed effectively to compete for quality tenants.

Tenant Expectations Are Evolving

We're seeing a shift in tenant preferences: flexibility, quality, and energy efficiency are now at the top of the list. Many renters expect digital convenience (such as online applications or maintenance portals), and well-maintained homes with modern features.

• In Manchester, 62% of households are now in rental accommodation
• In Tower Hamlets, London, the figure rises to 74%

Properties that meet these expectations are letting faster and commanding higher rents. Agents can help landlords adapt and upgrade where necessary, and use these points to justify pricing.

Policy Watch: Renters' Rights Bill 2024

The proposed Renters’ Rights Bill could bring substantial changes:

These changes may influence how landlords manage tenancies, and they’re likely to increase the need for professional support from letting agents as compliance becomes more complex.

We’d recommend keeping landlords informed and starting conversations early, especially for those with multiple properties or older tenancy agreements.

Final Thoughts

Market shifts like these don’t just affect landlords and tenants, they shape how you run your business. Whether it's pricing advice, portfolio strategy, or compliance guidance, staying informed means staying ahead.

We’ll continue sharing insights as new data becomes available. If you’d like support aligning your outreach or landlord engagement with what’s happening in the market, we’re here to help.