Renters get relief as rental market cools and wages rise

Rent prices in the UK are rising at the slowest pace in years, offering some relief to households already feeling the cost‑of‑living squeeze. Zoopla reports rents are up 1.9 per cent year on year, down from 2.8 per cent previously, leaving the average monthly rent at £1,319.

The mood in the market has shifted toward balance, with competition to secure a rental home easing to its lowest level in six years. Enquiries per property have fallen from about 6.5 to 4.8 in the four weeks to March 1 compared with a year earlier, now sitting at less than half the peak seen in 2022 and 2023. Crucially, wages are rising faster than rental prices, offering some relief for renters across generations, particularly millennials and Gen Z.

But there are notable exceptions. In London, the rental market remains notably tight due to a limited supply of rental properties, even as the rest of the UK shows signs of more balance. Some landlords have pulled back amid extra red tape and taxes, while policy changes like the Renters Rights Act coming into force in May, along with tougher green regulations, could still push rents higher in certain areas.

Zoopla’s data also reflect regional differences. In some UK cities, rents have fallen slightly, a trend the property portal partly attributes to slower net migration. Official estimates show net migration into the UK peaking at 944,000 in the year to March 2023 and slowing to about 204,000 in the year to June 2025. Mortgage costs have moved in the same direction they did earlier in the cycle, and the report notes that cheaper borrowing helped renters access home loans and, in turn, freed up more homes for rent. The note also points out that mortgage costs had been easing until the war in Iran began, a factor in shifting the market dynamics.

Overall, the rental landscape appears more balanced than in the peak years, but headwinds remain, especially for renters in London and households sensitive to policy changes. The fall in competition and ongoing wage growth give some confidence that the market can absorb new supply and shifting demand in the months ahead.

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