Experts Predict Rents Will Keep Rising as Supply Struggles to Keep Up with Tenant Demand.
UK rents are continuing to climb faster than house prices, with experts forecasting that this trend will persist as tenant demand remains high. According to recent data from the Office for National Statistics, UK rents have risen by 9% in the year leading up to December 2024, marking a more moderate pace compared to the double-digit growth seen immediately after the pandemic. However, this still means that the average rent in England now stands at £1,369 per month, with notable increases in several regions.
In Wales, tenants are paying £777 per month on average, reflecting an 8.5% annual increase, while in Scotland rents have climbed 6.9%, reaching £991. London continues to top the charts, with average rents now at £2,220, following a steep 11.5% rise over the past year. This growth has made the capital’s rental market the most expensive in the country.
Outside of London, the North West has seen the second-largest rent increase, with a jump of 9.6%, bringing the average rent in the region to £882 per month. Meanwhile, the North East has experienced an 8.9% rise, with average rents there still the lowest in the country at £706 per month. The North East, along with Yorkshire and the Humber, remains an attractive market for buy-to-let investors, as rental yields in these areas are among the highest due to affordable property prices and strong tenant demand.
With rental demand continuing to outstrip supply in most parts of the country, property investors are closely monitoring these patterns. While there’s been some concern over landlords exiting the market due to regulatory pressures, the current high demand for rental properties means landlords are still achieving strong returns in key areas.
Despite the challenges, the outlook for UK rents remains upward, especially in regions with high demand. Nathan Emerson, CEO of Propertymark, suggests that the government needs to act by boosting the supply of rental homes to strike a fair balance between tenants and landlords. As the UK population continues to grow, ensuring the supply of rental properties keeps pace with demand will be key to stabilizing the market.
Looking ahead, Gareth Atkins from Foxtons predicts modest rent growth of around 3-5% in the coming year, but warns that the real challenge will be maintaining adequate supply in the face of surging demand. The rental landscape will continue to evolve as tenants seek homes in city centers and desirable areas, further driving the growth of rents in the short term.
