Landlords who resisted the temptation to sell their rental properties in the wake of the election should be rewarded with an average rental rise of around 4% in 2025, according to Zoopla. Its analysis suggests that the cost of new rentals will rise faster than the 2.5% growth expected in average house prices for the same period.
We expect rents for new lets to increase by 4% over 2025, at a faster rate than the 2.5% growth in average house prices.
The property platform says, “Rents are set to outpace capital values for the next 3 years, boosting yields further. The impetus for rental growth will come from areas where rents are cheaper and have headroom for above-average growth, including rural areas and smaller towns well-connected to larger cities – where rents are already rising more quickly.”
If you’ve been considering selling your rental property in the UK due to upcoming legislation changes including the Renters’ Rights Bill and Stamp Duty increase it could be worth a rethink.
The National Residential Landlords Association expects 31% of current landlords to sell up within the next two years. And fewer new landlords are expected to enter the market, with a 7% drop in buy-to-let mortgages also expected. That spells bad news for tenants as it means supply of rental property will continue to be stretched – but it’s good news for those landlords who don’t sell, as demand will push up rental prices. It also puts landlords in the driving seat when it comes to selecting tenants.
