'Still being squeezed': Rent rises slow to four-year low but low-income tenants say crisis far from over
11 June 2025, 00:29
Rental prices have slowed to their lowest annual increase since the market was dealing with the impacts of the coronavirus pandemic, according to figures from a property website.
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Average UK rental prices for new lets in April were 2.8% higher than a year earlier, marking the lowest rate of rental inflation since July 2021, Zoopla said.
The average monthly rent now stands at £1,287 per month, marking a £35 annual increase.
Rental price inflation is now running at less than half the levels seen a year earlier, with a typical 6.4% annual increase in rental prices recorded in 2024.
Despite the slowdown, average UK rental prices have still jumped by more than a fifth (21%) over the past three years, Zoopla said.
The website noted a particularly big slowdown in rental prices in Yorkshire and the Humber compared with a year earlier, with annual rental inflation now put at 1.1%, down from 6.4% in 2024.
This is due to slower rental growth in key university cities, such as Sheffield, Bradford and Leeds, the website said.
In the North East of England, rental growth has slowed to 5.2%, down from 9.4% in 2024.
In Scotland, the rate of annual rental price growth has slowed to 2.4%, with Dundee recording a 2.1% annual fall in rental prices, compared with a 5.8% increase in 2024.
Rental growth in London stands at 1.5%, Zoopla said, with average rents at £2,175 per month.
The slowdown in the rate of rental growth is a result of weaker rental demand and growing affordability pressures, rather than an increase in supply, the report suggested.
Mortgage rate stability and improved access to mortgage finance for first-time-buyers, many of whom rented before buying a home, are also factors, it added.
Despite weaker demand, renters are still facing a limited supply of homes for rent, Zoopla said.
Richard Donnell, executive director of research at Zoopla said: “Rents rising at their lowest level for four years will be welcome news for renters across the country. The average annual cost of renting is over £2,500 a year higher than three years ago, the same as the increase in average mortgage repayments for home owners.
“While demand for rented homes has been cooling, it remains well above pre-pandemic levels, sustaining continued competition for rented homes and a steady upward pressure on rents.
“The pressures are particularly acute for lower to middle incomes with little hope of buying a home and where moving home can trigger much higher rental costs.”
Adam Jennings, head of lettings at Chestertons, said: “To stay ahead of the competition, tenants are advised to start their property search as early as possible but also establish what they might be prepared to compromise on whether that’s price, location or the size of the property.”
Tom Bill, head of UK residential research at Knight Frank said: “Rental value growth has cooled over the last year but upwards pressure remains thanks to tight supply. While some demand has transferred to the sales market as mortgage rates edge lower, a number of landlords have sold due to the tougher regulatory and tax landscape.”
Greg Tsuman, managing director for lettings, Martyn Gerrard Estate Agents said: “There is immense pressure in the rental market right now.”
Angharad Trueman, president of Arla (Association of Residential Letting Agents) Propertymark, said: “A significant number of landlords face increased costs across the board, from continuous legislative hurdles, tax hikes, and mortgage increases, many are struggling to break even on their costs.”
Ben Twomey, chief executive at Generation Rent said: “The price of new rents finally slowing will sadly not undo the enormous rent rises we have seen in recent years.”
The Zoopla rental index tracks rents for new lets when homes become vacant.
