"The majority of landlords are looking to stay in the market and even grow their portfolios, which is positive for tenants, but there are clearly challenges for those looking to invest in rental property"
- Colleen Babcock - Rightmove
The average advertised rent for homes outside London rose again in Q3 2025, reaching a record £1,385 per calendar month (pcm), representing a 3.1% increase compared with the same period last year, according to the latest data released by Rightmove.
In London, average advertised rents also hit a new high of £2,736 pcm, though annual growth has slowed to just 1.6%.
The total number of homes available to rent is edging closer to pre-pandemic levels, yet the pace of new rental properties entering the market has slowed.
The number of available homes to rent is now 9% higher than this time last year. While this is still 23% below 2019 levels, it marks the closest supply has come to pre-pandemic norms in four years.
New rental listings are only 1% higher than last year, the lowest rate recorded in 2025.
Stamp duty changes, potential national insurance adjustments in the Autumn Budget, and the upcoming Renters’ Rights Bill are all creating uncertainty for landlords.
Affordability continues to challenge both tenants and landlords seeking to invest:
Average earnings have risen by 5% over the past year, outpacing rent growth, yet renting still consumes 44% of the average wage, up from 40% five years ago.
A 20% deposit for a typical first home has increased by over £5,000 in five years.
The average interest rate on new buy-to-let mortgages is 4.87%, down from 5.21% last year but nearly double the 2.93% rate seen before the 2022 mini-Budget.
Average advertised rents outside London have risen by 1.5% this quarter, an increase of £20 pcm, marking the third consecutive quarterly record. Meanwhile, London rents have grown by 0.9% (+£24 pcm) this quarter.
The slowing supply of new rental properties has coincided with a cooling in tenant demand, which is 14% lower than the same period last year.
Recent surveys of landlords highlight market caution. One in three landlords said they were considering leaving the sector eventually, and two-thirds (66%) felt unsupported by government policy. Fewer than half (43%) reported being fully aware of the Renters’ Rights Bill and prepared for its implications.
“The majority of landlords are looking to stay in the market and even grow their portfolios, which is positive for tenants, but there are clearly challenges for those looking to invest in rental property," explained Rightmove property expert Colleen Babcock.
She added, "Sustained high mortgage costs mean landlords need to make sure purchases are viable, and uncertainty around legislation like the Renters’ Rights Bill and what may or may not be in the upcoming Autumn Budget isn’t helpful when looking to make financial investments. Landlords who were considering selling up over the next year told us that legislation changes were their biggest source of frustration."
"The government needs to consider this when setting its policy agenda over the next twelve months, otherwise we may see more landlords choose to leave the sector, which will be to the detriment of tenants.”
Daniel Fisher, head of lettings at John D Wood & Co, said, “Tenant demand has eased as wider economic and political uncertainty makes people more cautious about moving, with many businesses scaling back relocations and some renters leaving London altogether."
"This has led to more re-let properties coming to market, even as the overall number of landlords declines. At the same time, many landlords are hesitant to invest amid limited capital growth, shifting tax rules, and ongoing uncertainty around the Renters’ Rights Bill and the Budget."
"The result is a slower, more cautious market that’s likely to remain uneven over the next year or so, though this also presents opportunities for well-capitalised landlords to expand as others exit, and for tenants to benefit from a wider choice of homes.”
