Curious about what the rental market might look like in 2025? Reflecting on the patterns and trends observed throughout 2024, the year ahead is expected to bring some notable shifts in the rental landscape. While demand remains high, there are signs that the market may become more balanced, offering a less frantic experience for renters. This potential shift comes as the pace of rent increases begins to slow, providing a glimmer of hope for those feeling the squeeze from years of rapid rises.

At the beginning of 2024, rental properties were attracting an average of 19 enquiries each, a clear indicator of how competitive the market has been. However, by the end of the year, this number had decreased to 11 enquiries per listing. While still almost double the pre-pandemic average of six enquiries per property in 2019, the decline suggests that the intense pressure of recent years may be easing. This change can partly be attributed to a 19% decrease in the number of renters actively searching for homes since 2023, coupled with a 7% increase in the supply of available rental properties. As a result, 2025 could see a more balanced market where renters and landlords alike benefit from a slightly less competitive environment.

Despite this moderation, rents are still expected to increase, although at a slower rate than seen in previous years. In 2024, rents outside London grew by 4.5%, reaching an average of £1,339 per month, while rents within London rose by a more modest 2%. These were the smallest annual increases since 2021, marking a departure from the steep hikes that have characterised the market in recent years. For 2025, experts predict advertised rents will rise by around 3%, both inside and outside the capital. This slower growth could signal a more stable period for the rental market, offering some much-needed relief to tenants.

However, affordability remains a significant challenge. Over the past five years, average rents have risen by 40%, far outpacing the 28% increase in wages over the same period. This disparity has stretched many renters to their financial limits, leaving little room for further rent hikes. Recognising this, landlords are increasingly prioritising retaining their existing tenants over pushing rents higher, particularly in the current climate of rising living costs. Evidence of this can be seen in the growing number of price reductions, with 26% of rental properties experiencing lowered advertised rents, up from 23% a year ago.

For renters, the evolving market dynamics in 2025 may offer some opportunities. The slower pace of rent increases, combined with a higher number of properties available and more landlords willing to negotiate, could make the market slightly more favourable. However, competition for quality rental homes is expected to remain robust, meaning renters will still need to be proactive, well-prepared, and flexible in their searches.

As the rental market adapts to the changing economic environment, 2025 promises to be a year of transition. While affordability challenges are unlikely to disappear overnight, the prospect of a more balanced market with tempered rent growth offers hope for renters seeking stability in the years to come.