Demand within the rental sector continues to cooling as extra tenants search to get a foot on the housing ladder, the most recent Hamptons Month-to-month Lettings Index has revealed.
The variety of tenants registering in lettings branches throughout Nice Britain was down 17% on the identical time final yr and is now working 28% beneath 2019 ranges.
This decline in tenant registrations is widespread, with 63% of branches reporting fewer tenants registering in Might 2025 in comparison with Might 2024. This marks the twelfth consecutive month by which tenant demand was decrease than the identical time final yr.
Yr-on-year change in new tenant registrations
Supply: Hamptons
For would-be first-time consumers with small deposits, falling mortgage charges have pushed the month-to-month value of buying beneath the price of renting. Anybody with a deposit of at the least 10% is now prone to discover themselves higher off shopping for than renting.
This shift has hit tenant demand in additional prosperous areas, specifically, the place tenants are most certainly to purchase. Tenant demand has fallen 50% extra in probably the most prosperous areas than within the least prosperous areas.
Thus far in 2025, there have been a median of 1.5 tenants registering to search out someplace to lease for every potential first-time purchaser. This ratio has almost halved since mortgage charges peaked in 2022 and 2023, pushed by each falling tenant numbers and elevated purchaser demand from first-time purchasers.
Again in 2017, there have been a median of 5.9 tenants registering in a department searching for someplace to lease for every would-be first-time purchaser searching for someplace to purchase. Nonetheless, this ratio has been steadily shrinking, which coincides with a rising share of first-time consumers.
For the primary time in at the least the final decade, each London and Scotland have seen extra first-time consumers seeking to purchase than there are tenants seeking to lease.
Within the capital, first-time consumers have accounted for 50.3% of latest purchaser registrations this yr, with numbers up 2% year-on-year, regardless of a fall in demand from different consumers.
Ratio of latest tenant to first-time purchaser registrations (2025)
Supply: Hamptons
On the finish of Might, there have been 5% extra properties on the rental market than on the finish of Might 2024. The variety of properties out there to lease has elevated yearly in each month since August 2022, regardless of a decline in new buy-to-let purchases. The rise in provide displays how properties are taking just a little longer to let, as a result of weaker demand. Nonetheless, in latest months, the dimensions of will increase has dropped again to low single digits.
This slight enhance in provide, mixed with weaker demand, has diminished rental progress. The typical lease on a newly let property in Nice Britain rose 1.5% during the last 12 months to £1,366 monthly (chart 4, desk 1). This implies rents are rising at an identical tempo to 2013, after they rose by a median of 1.6%. In Might 2024, common rents elevated by 5.1% yearly, indicating that the tempo of progress has declined by almost two-thirds during the last yr.
Annual rental progress (Nice Britain)
Supply: Hamptons
For the 20th consecutive month, rental progress on renewals (ie when a tenant renews an present contract) rose quicker than new lets (when a brand new tenant strikes right into a property). Tenants staying put noticed rents rise by a median of three.7% to £1,267 monthly in Might. This leaves the typical tenant renewing a contract paying £99 monthly lower than a tenant transferring into a brand new dwelling.
For tenants transferring into a brand new property, rental progress stays highest within the North and the Midlands. In the meantime, London rents fell 0.5% on the identical time final yr, decreasing the headline nationwide charge of rental progress by 1.0% (desk 1). Rents within the capital now stand beneath the place they had been in June 2023.
Rental progress in Might 2025
| Area | New lets | Renewals | ||
| Common month-to-month lease | YoY % | Common month-to-month lease | YoY % | |
| Higher London | £2,283 | -0.5% | £2,156 | 0.6% |
| Interior London | £2,668 | -1.6% | £2,630 | -1.2% |
| Outer London | £1,999 | 0.7% | £1,807 | 2.7% |
| South | £1,348 | 2.5% | £1,236 | 4.3% |
| East of England | £1,255 | 3.3% | £1,201 | 5.8% |
| South East | £1,475 | 1.8% | £1,340 | 3.0% |
| South West | £1,247 | 2.9% | £1,111 | 4.9% |
| Midlands | £1,037 | 3.1% | £943 | 6.7% |
| East Midlands | £995 | 3.4% | £897 | 5.6% |
| West Midlands | £1,074 | 2.9% | £983 | 7.6% |
| North | £949 | 2.7% | £882 | 6.9% |
| North East | £828 | 3.5% | £768 | 9.1% |
| North West | £1,022 | 4.1% | £905 | 7.8% |
| Yorkshire & The Humber | £906 | 0.4% | £903 | 5.0% |
| Wales | £870 | -0.2% | £803 | 2.8% |
| Scotland | £1,017 | 1.1% | £883 | 5.6% |
| Nice Britain | £1,366 | 1.5% | £1,267 | 3.7% |
| Nice Britain (Exc London) | £1,131 | 2.5% | £1,039 | 5.3% |
Supply: Hamptons
Aneisha Beveridge, head of analysis at Hamptons, stated: “In an identical pattern to the years following the final financial downturn, falling rates of interest have diminished the tempo of rental progress. Landlords rolling off short-term fixed-rate mortgages are actually seeing their month-to-month funds fall, decreasing the necessity to move on additional prices to tenants.
“On the similar time, decrease mortgage charges are altering the arithmetic for tenants who’re desirous about shopping for. Whereas charges stay excessive relative to pre-Covid instances, three years of above-inflation rental progress imply that for many, shopping for stays cheaper than renting. This has boosted first-time purchaser numbers and diminished demand within the rental sector.
“It has taken the perfect a part of two years for the tempo of rental progress to fall from double digits all the way down to 1.5%. Because of this rents are actually rising at a charge that’s near their long-term common, and means that the period of fast rental progress is behind us for now.
“That stated, rental progress is unlikely to chill a lot additional. Whereas falling rates of interest ought to take the sting out of rental progress over the subsequent few years, landlords will seemingly proceed to cost in political danger. Landlords are more and more getting their heads round what the Renters’ Rights Invoice will imply for them, however the best way it performs out for landlords in actuality will form future investor urge for food.”
