If you are a landlord, or are investing in property to let, here is an overview of what 2025 could look like.
Will the rental market be slightly calmer in 2025?
Earlier this year, there was an average of 19 enquiries per rental property. This number has since dropped to 11 enquiries per home listed for rent.
However, this figure is still nearly twice the six enquiries per property observed in the pre-pandemic market of 2019.
Compared to the same time in 2023, we’ve seen a 19 per cent decline in the number of people seeking to move, along with a seven per cent increase in the availability of rental properties.
As a result, the rental market in 2025 may be calmer than what we’ve experienced in recent years.
Will rent prices rise in 2025?
After several years of steep increases in average rents, this year experienced the smallest rise since 2021.
The average rent outside London has reached £1,339 per month, a 4.5 per cent increase compared to last year, while rents in London have risen by two per cent.
Looking forward, it is expected that advertised rents to grow by three per cent both inside and outside London in 2025.
The larger rent increase anticipated in London next year is driven by the resurgence of city centre living after the pandemic’s “race-for-space” period, as some companies bring employees back to office-based work.
What will have the biggest impact on renters?
It’s no secret that rents have been rising faster than wages in recent years.
Over the past five years, average rents have gone up by 40 per cent, while wages have only increased by 28 per cent.
As renters reach an ‘affordability ceiling’—the point where they can’t afford higher monthly rents—and landlords strive to keep their properties occupied, 26 per cent of rental homes have had their asking rents reduced, up from 23 per cent during the same time last year.
Landlords aiming to advertise rental properties in the upcoming months will need to balance between increasing rents to cover rising costs and ensuring affordability for tenants.
Get in touch for guidance on how changes in the rental market may affect your property income.
