Competition for rented homes has fallen to its lowest level in six years, according to Zoopla’s latest Rental Market Report.
Over the last year, demand among renters dropped by 14% while the number of homes for rent went up by 11%.
On average, there were 4.8 enquiries per property, down from 6.5 last year.
Rents for new lets rose by 1.9% in the past year.
Net migration into the UK has also slowed, from a peak of 944,000 in the year to March 2023 to 204,000 in the year to June 2025.
First time buyers (FTBs) made up around three-quarters of those leaving rented homes.
MHomes are now taking longer to rent out, with the average time to find a tenant at 20 days compared to 13 days in 2022.
The report also showed that average earnings have risen faster than rents for the last 18 months, helping improve affordability.
The average annual rent outside London is now 33.5% of gross income for a single person.
In 2023, it was 35%.
Rental growth was strongest in the North and Scotland, with Liverpool and Newcastle seeing increases of 4.6% and 4.5%.
Cities in the Midlands and the South showed slower or negative growth.
Bristol grew by 0.8%, Cambridge by 0.1%, while Birmingham and Nottingham saw rents drop by 0.7% and 0.8%.
London rents went up by 1.7%, with the average at £2,187.
Wales dropped from 4% to 2.3%, while the West Midlands fell from 3.8% to 0.3%.
Richard Donnell, executive director at Zoopla, said: “Market conditions for renters are the best they have been for 6 years.
“The rental market is moving back towards balance as demand cools and more homes become available to rent.
“Renters are facing less competition for homes and slower rent increases than in recent years.”
Donnell added: “Localised changes in demand and supply are resulting in rents falling in some cities but this will be only a short lived trend.
“However, supply remains well below pre-pandemic levels, which means increasing the number of rental homes remains key to improving affordability for the UK renters over the long term.”
REACTION:
Harry Watts, lettings director at Douglas & Gordon:
“We’re seeing a more mixed picture on the ground in Central and South West London.
“While the market has become more balanced compared with the 2022–23 peak, applicant registrations are still up 18% so far this year versus the same period last year, which points to continued underlying demand for well located, good quality homes.
“At the same time, as we move closer to the Renters Reform Act, we’re seeing more tenants being asked to move at points in the year when they would not typically expect it.
“In many cases, this appears linked to landlords reassessing their position and, in some instances, choosing to sell, which is becoming more prevalent.
“And even where rental growth is cooling, there is a clear affordability ceiling.
“Over the past couple of years, tenant incomes have struggled to keep pace with pricing, so correctly priced homes let well, while anything ambitious is taking longer and facing sharper negotiation.”
Nathan Emerson, CEO at Propertymark:
“The rental market continues to bring challenges that are tightly aligned to both fundamental economic pressures and new influence from updated legislation.
“We are witnessing some of the biggest changes in well over 30 years, with the introduction of additional consumer protections, plus a modified taxation framework for landlords.
“We currently have a rental landscape where demand for properties continues to outstrip available stock.
“Any reported uplift regarding additional rental properties being available must closely acknowledge the scenario of there still being intense pressure on supply.
“In addition, when looking at the latest data available, Propertymark members report a near 7% increase in the number of landlords who have chosen to sell their properties year on year.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“Conditions for letting property are favourable at present given the level of stock being sold and demand remaining strong in most areas, so many longer-term landlords are taking advantage.
“However, the reason why many are leaving the sector is the looming Renters’ Rights Act which is due to become law on 1 May.
“Landlords will then find regaining possession is likely to prove more difficult – they will have to wait over a year if they want to re-let to prevent back-door evictions, they won’t be able to increase the rent more than once a year and then subject to review, as well as stricter penalties, to name but a few changes.
“As a result, an increasing proportion of landlords are not renewing agreements and trying to sell despite the attraction of higher rents and yields.
“We’re finding many of those staying put are increasing rents to market levels while they can but ensuring references, guarantees and insurance are up to speed as well as instructing qualified agents to reduce the risk of problems arising.
“Even those with tenants who have proved reliable in the past appreciate circumstances change and nothing stays the same.”
