According to Zoopla’s latest Rental Market Report, the number of available rental properties increased by 11% in Q1, while rental demand declined by 17% compared to the previous year.

Despite this decrease in demand, competition for rental homes remains significant. Zoopla reports that an average of 12 prospective tenants are competing for each available property. While this represents a 42% reduction from the levels seen between 2022 and 2024, it remains higher than pre-pandemic figures.

Affordability remains a key issue for renters, with annual rental costs across the UK rising by over £3,000 to a total of £15,400 per year. In London, rental inflation increased by 1.1%, and the annual rate of rent inflation for new leases is now at its lowest level in three and a half years.

Rental prices rose by 3% over the past year, a slowdown from the 7.4% increase recorded in the previous year.

Richard Donnell, executive director at Zoopla, commented: “Rental inflation has slowed, which will be welcome news to renters but there are still 12 people chasing every home for rent. Growing supply is essential to support those on lower incomes and policy reforms for the rental market need to minimise the impact on supply.”

The supply of rental properties continues to be a challenge. Angharad Trueman, president of ARLA Propertymark, highlighted the issue: “The issue of demand far outstripping the number of homes available to rent is continuous. Month on month, Propertymark letting member agents report a lack of supply compared to the ever-growing number of people looking to rent a home, most recently stating that the average number of applicants per member branch is around 7 people for each available property.”

Trueman also addressed the financial pressures faced by landlords: “Landlords are battling ongoing increases in their overheads including rising taxes, mortgage rates and continuous challenges of ever-complex regulation, with many finding it difficult to break even on costs.”

She warned of the potential long-term impact: “The rental landscape continues to put pressure on current and future investors and, ultimately, without support for landlords to enter in the future or remain in the market, rent prices and stock levels are likely to continue to worsen.”

As the rental market continues to adjust, policymakers and industry stakeholders will need to consider measures to balance supply, demand, and affordability in the sector.