Competition for rented homes falls to lowest in six years – Zoopla

Competition for rented homes has fallen to its lowest level in six years as demand eases and more properties become available to let, Zoopla has revealed.

The property platform says renters are now making an average of 4.8 enquiries per property, down from 6.5 a year earlier.

The change follows a 14% drop in demand alongside an 11% rise in the number of homes available for rent.

As a result, rent increases for new lets have slowed to 1.9% over the past year, compared with 2.9% previously.

Best renter conditions

Richard Donnell, executive director at Zoopla, said: “Market conditions for renters are the best they have been for six years.

“The rental market is moving back towards balance as demand cools and more homes become available to rent.

“Localised changes in demand and supply are resulting in rents falling in some cities but this will be only a short-lived trend.

He added: “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.”

Lower migration hits demand

Lower demand is linked to improving mortgage conditions for first-time buyers and a reduction in migration for work and study.

Official estimates show net migration peaked at 944,000 in the year to March 2023 before falling to 204,000 in the year to June 2025.

About three-quarters of first-time buyers previously came from the rented sector.

As borrowing conditions have improved, more households moved into home ownership, reducing demand for rented homes.

Sellers decide to rent

At the same time some homeowners unable to secure a sale have opted to place their properties into the rental market instead.

The increase in supply has also extended letting times.

Homes now take an average of 20 days to find a tenant compared with 13 days at the peak of the market in 2022.

For tenants, that means a wider pool of properties and slightly more time to secure a home.

Regional rent rises

Meanwhile, Zoopla also says that average earnings have risen faster than rents over the past 18 months.

The typical annual rent outside London now accounts for 33.5% of the gross annual income for a single person.

In 2023 the ratio reached 35%, the highest level recorded in two decades.

Rent increases remain higher in more affordable northern markets.

Liverpool recorded annual growth of 4.6%, while Newcastle posted a rise of 4.5% and London’s rents grew by 1.7%.

However, Bristol recorded growth of 0.8%, while Cambridge registered a marginal 0.1% increase.

In Wales, annual rent growth fell from 4% last year to 2.3%, a drop of 1.7 percentage points.

Property sector reaction

Tom Bill, the head of UK residential research at Knight Frank, said: “More balance has returned across the UK but in the capital, where renting is twice as common, there is still a notable lack of supply in many areas that is pushing rents higher.

“Some landlords have already sold due to extra red tape and taxes while others are waiting to see how disruptive the Renters Rights Act is when it comes into force in May.

“With tougher green regulations also coming down the line, further upwards pressure on rents cannot be ruled out.”

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “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.”

Gary Howorth, the regional sales director at Chestertons, said: “More first-time buyers have taken the step towards home ownership this year.

“In some parts of the UK, including some areas of London, this has weakened demand for rental properties.

“Remaining tenants looking to move now benefit from a larger pool of properties to choose from but we will likely see the market turn and demand go up again as we enter spring; a particularly busy time for tenants looking to move.”

Nathan Emerson, the CEO of Propertymark, said: “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.”