Zoopla’s latest research shows that rental market conditions are steadily improving after three years of chronic undersupply and excess demand. There remains a mismatch in supply and demand, which is not going to rebalance anytime soon, meaning continued upward pressure on rents.
However, rents are increasing at their lowest rate for 3.5 years. This has more to do with worsening rental affordability than with an improvement in the supply of homes for rent. Household cost of living data also shows that living costs for private renters rose faster than for any other group in 2024.
Demand for rented homes is expected to continue to exceed available supply in 2025, but to a lesser extent than in the recent past. The overall stock of rented homes is unlikely to increase in size in the coming years due to policy changes impacting profit margins and operating complexities for landlords.
