The UK private rental market has been the subject of much discussion in recent years, and with the upcoming Renter's Rights Bill, it has been experiencing more scrutiny and change than ever before. That said, it remains an important part of the UK infrastructure and economy, and if we look at the current trends, we continue to see the need for well kept, well managed rental properties, and responsible landlords.
Despite a lot of doom and gloom in the newspapers, demand for rental properties continues to grow across the UK. Northern regions are reporting particularly high growth rates, with cities like Manchester and Leeds averaging 6.5% rental yields last year.
However, while London and prime southern markets have had a slower pace of growth, average rents remain high as a general rule. In July, The Guardian reported "prices have risen by 0.2% in the south-east and London and by 0.3% in the south-west", continuing that asking prices across the UK had risen "1.2% to a new record of £1,365 per month in the second quarter of 2025". They noted that "the average advertised rate in the capital also reached a new high of £2,712, up 0.5% over the quarter."
It’s true that the pace of growth has slowed in rental properties, however there is still growth in the market. Rightmove, for example, wrote last year that "average rental prices are 7% higher than a year ago, slowing from a peak of +12% in 2022."
There's no doubt that the rental property market, while popular, is also competitive for landlords, and it's notable that new rental supply has increased over the last year. Zoopla reported:
"Rental supply has increased, with 17% more homes available than a year ago, as homes take slightly longer to rent. There are also signs of increased landlord purchasing activity as borrowing costs fall."
While many are quick to say that there's a surplus of property available, Zoopla's figures highlight that "rental supply remains 20% below pre-pandemic levels". As a result, renter demand is still robust as the population grows and home ownership continues to fall. It may simply be that there’s something of a levelling out process that continues post pandemic.
Adam Jennings, head of lettings at Chestertons, told The Standard: “Overall, the UK’s rental market remains highly competitive as a growing population results in a continuous requirement for suitable housing", continuing: "Despite occasional market fluctuations, demand will likely always outweigh supply which can result in a challenging property search for tenants. In fact, based on 2025 market trends this summer may be the most competitive we have seen for many years."
In a competitive market, astute landlords are mindful that creating rental properties that adhere to the changing requirements of tenant lifestyles and preferences can deliver a competitive edge, both for attracting tenants and retaining good ones.
Post-pandemic, the rise in hybrid and remote working has reshaped some renter priorities. For example, reliable high-speed internet, home office areas, and access to green spaces are all continuing to be high-demand features.
With more people spending more time at home, well-maintained interiors help create desirable properties. Meanwhile, energy efficiency and practical elements, like storage and in-built appliances, support affordability as well as personal values such as environmental awareness.
It's undeniable that economic factors are influencing the rental market both for landlords and tenants. Cost of living pressures squeeze all areas of life, with inflation impacting both affordability and landlord flexibility on pricing. In addition, the current speculation around the autumn budget, including the Chancellor's possible plans to add National Insurance to rental income, or implement potential annual property taxes, are prompting some landlords to exit the market or speculatively raise rent.
Perhaps the biggest influence on rental market trends at the moment is the impending Renters' Rights Bill and its component details.
Key features include:
● The end to Section 21 evictions
● Limiting rent increases to once annually
● Banning bidding wars
● Capping advance rent
● Tougher standards and enforcement
While all these facets are intended for good reason, they do create an air of caution amongst responsible landlords. In addition, forthcoming energy efficiency mandates impact the ability of prospective landlords to let properties or the requirement to invest in updates, which may or may not be feasible for them. For example, there's the new provision that rental properties must meet an EPC rating C by 2030, and the Future Homes Standard, which mandates that new builds must produce 75 to 80% lower carbon emissions from 2025.
While the media paints an often gloomy picture of the letting market, and indeed there are a growing number of regulations and considerations to take into account when renting your property, in reality, property remains a good investment for those who are interested and able. It is for good reason that those taking a long-term view continue to have faith in the adage 'safe as houses'.
In many ways, the increased regulatory environment and associated scrutiny, are indications of the ongoing success of the property market, and the importance of the rental sector. However, it does mean that there is more benefit than ever before for landlords to seek professional advice when it comes to ensuring you are acting within recommended best practice from day one, and that's where an experienced letting agency can provide both reassurance and practical support.
Chestertons is the premier London lettings and estate agency with more than 200 years’ experience and a team of experts offering a range of services from a full-time compliance department to valuations and management, for both long- and short-term lets. If you would like to find out more about working with Chestertons contact your local Chestertons letting agent at any time.
Contact your local Chestertons letting agent