The Zoopla PRS March update for 2025

There are some positives happening in the private rental sector, albeit very slow positives, with the supply and demand balance narrowing, with more properties available than a year ago, though there are, on average, still 12 'renters' for each property listed.

Annual rent inflation is at its lowest level for over 3yrs. Rents have increased by 3% in the last 12 months which is a lot lower than the 7.4% 12 month previously.

The UK rental still needs a lot more supply, but the government rental reforms have put paid to that happening, especially in the short term, where we are seeing more and more smaller BTL landlords selling up and leaving the sector, due to rising taxes, and regulation changes.

It is predicted that UK rents will rise by 3-4% over the course of 2025, and data from the Office for National Statistics shows that the living costs for private renters increased quicker than any other group throughout 2024.

The Renters Rights Bill, which is still on the horizon for 2025 is forcing many out of the sector, and frightening many new investors to enter the buy to let sector, the Bill in short is increasing the cost of being a landlord. The government has also stated that by 2028 all private rented homes must have a minimum energy rating of 'C' before they can be let out. When we consider that currently nearly half of all the UK stock of private rented accommodation is a 'D' rating or below, and that all those landlords will have to pay quite substantial sums of money to get their property upto the regulatory 'C' rating, it is unaoivdable to think that a large proportion of those properties will be taken out of the sector, further adding to the undersupply. This in turn will further inflate rents, as the supply dwindles, and ultimately hinder tenants in finding a home.

The predictions for 2025 show that demand for rented homes is going to continue to outstrip the available supply, but this is falling compared to other years recently. The overall stock of rental property is likely to remain fairly static over the next few years, due to less new landlords enetering the sector, and more landlords exiting. Areas where we are seeing the rents rising the quickest include Blackburn (10%), Stoke on Trent (9.6%) and Rochdale (9.3%). 

For more information on the current PRS you can visit Zooplas rental report for March 2025, or download the full report here.