Demand for houses to hire slides as extra individuals get on the ladder: Will it make rents cheaper?

Demand for homes to rent is falling as net migration falls and more people get on the property ladder, new data suggests. 

The property website Zoopla revealed that the number of tenants seeking a home has fallen by 20 per cent over the last year, while the number of homes available to let has risen by 15 per cent.

This could potentially mean rents rise less quickly, after years of soaring costs and hot competition among tenants to secure a property. 

Richard Donnell, executive director at Zoopla said: ‘The rental market has made a big stride back towards normality over 2025 after a prolonged period of sky-high demand and a lack of homes for rent. 

‘This is welcome relief for renters who can expect to see a greater choice of homes, slower rent increases and a less competitive market.’

The drop in demand reflects two main factors, according to Zoopla. First, a sharp decline in net migration, which Office for National Statistics provisional estimates say has fallen by 78 per cent between June 2023 and June 2025. 

The other factor is that mortgage rates have fallen and some banks are willing to lend larger sums to first-time buyers. 

This has boosted demand to buy homes and removed some would-be tenants from the rental market, Zoopla said. 

Zoopla says the market is on track for 20 per cent more first time buyers purchasing homes over 2025.

This is also one of the reasons why there are 15 per cent more homes to rent compared to a year ago, as these buyers end their leases.

Adam Jennings, head of lettings at London estate agent Chestertons, said: ‘More aspiring first-time buyers are taking the necessary steps towards homeownership, which is further boosted by the current choice of mortgage deals.

‘This has somewhat dampened demand for rental properties in some parts of the country and could result in rent levels remaining fairly balanced in 2026.’

The average estate agency branch now has 14 homes for rent, less than the pre-pandemic average of 17. 

Unsurprisingly, the time it takes for landlords to rent their properties has been increasing, with the average home staying on the market for 17 days before being rented. 

This is almost a fifth higher (18 per cent) than a year ago and 42 per cent longer than during the demand boom for rented homes during the pandemic.

The time to rent has increased across all regions and countries of the UK as the pressure on the rental market has cooled, with the average ranging from 14 days in Scotland to 19 in the West Midlands. 

Are rents starting to fall?

Some local markets are registering a decline in rents for new lets, with rents lower than a year ago in Birmingham, where rents have fallen 1.5 per cent and Dundee, which has seen a 1 per cent drop. 

However, most locations are still showing rents are higher now than they were a year ago.

Rents are rising fastest in Carlisle, up 8.1 per cent, Chester (7.4 per cent) and Motherwell, up 7 per cent. 

Zoopla suggests the differences reflect the affordability of rents relative to local incomes, as well as demand and supply. 

Across the market more broadly, rental growth has slowed from the double-digit increases recorded in the early 2020s.

The average rent as of October in London was £2,224, only 1.6 per cent higher than this time last year.

Similar stories are playing out across the West Midlands and East Midlands, with prices only up 1.7 per cent and 1.9 per cent respectively.

Rental prices in Scotland are up 1.7 per cent and in the Yorkshire and the Humber  they are up 1.8 per cent.

However, some regions are recording rising rents that are moving broadly in line with the rate of inflation (3.6 per cent in the 12 months to October).

Rents in the South West are up 3 per cent and in the North West they are up 3.2 per cent. In the North East rents are 4.5 per cent higher than they were a year ago. 

Matt Hutchinson, director of flatshare website SpareRoom says that he’s seeing a similar pattern in the flatshare market, but because demand still outweighs supply, rents haven’t corrected.

‘After the pandemic, when restrictions on movement were finally lifted there was a stampede to secure rented accommodation. Demand for rooms hit record highs 

‘Demand has now more or less corrected back to pre-pandemic levels, so that narrowing we’re seeing now is demand coming down off the mountain, not going into a valley. 

‘Pricier areas like London have started to flatline as renters have hit their ceiling of affordability, but rents are still climbing in more affordable areas, including suburbia, where slightly more affordable rents are often offset by expensive commutes.’