Rents look set to continue rising as the supply-demand imbalance in the market widens.
With various reports confirming that a growing number of landlords are fleeing the PRS in light of yet more tax and regulatory changes, rental prices remain on an upward trajectory – and that is unlikely to change anytime soon.
“Upwards pressure on rents is likely to intensify as landlords leave the sector due to tougher green regulations, higher mortgage costs and the impact of the Renters Rights Bill, which makes it harder to regain possession of a property,” said Tom Bill, head of UK residential research at Knight Frank.
“Nobody would argue against protecting tenants from unscrupulous landlords, but the new legislation could be a lesson in the laws of unintended consequences,” he added.
According to the latest data released by the ONS on Wednesday, the average rent paid by UK tenants in March 2025 reached £1,332pcm, up 7.7% year-on-year.
In England, the average rent was £1,386, up 7.8% compared with March last year, although it is worth noting that this marks a fall from February’s 8.3% growth.
Rents in Wales stood at £792, up 8.9%, while Scotland’s average reached £1,001 — an annual rise of 5.7%.
Northern Ireland had an average rent of £838 in January 2025 – up 8.2% year-on-year.
Alex Upton at Hampshire Trust Bank commented: “The rental market remains under significant pressure, with demand continuing to outstrip supply. Letting agents are managing multiple applicants for every available property. While stock levels have seen some movement, competition remains fierce. Until that imbalance shifts, rental prices will continue to rise.
“At the same time, the Renters’ Rights Bill is adding uncertainty for landlords. Proposed changes such as the removal of Section 21 may prompt some smaller or more cautious landlords to exit the market altogether, further reducing already stretched rental stock.
“We are also seeing a shift. Professional landlords are reassessing their portfolios with a long-term view, targeting properties that deliver tenant appeal and resilient yields.
Nathan Emerson, CEO of Propertymark, added: “The rental sector continues to see sizable challenges from a magnitude of different angles currently. We continue to see a considerable mismatch between supply and demand with an average of ten people wishing to rent each property currently available across the UK.
“In addition, we are seeing vast legislative changes that will affect how and if some landlords are able to continue operating within the sector. Throughout the last twenty years renting a property has become enormously more popular with people, and it’s vital there is targeted support and investment in the sector to keep pace with ever intensifying demand.”
Sharp drop in rental properties as BTL landlords flee the market
Read the orginal article: https://propertyindustryeye.com/upwards-pressure-on-rents-is-likely-to-intensify-as-landlords-leave-the-sector/
