The findings of recent analysis from Pegasus Perception present that tenant demand stays strong in most components of the nation however that it could be a turning level for landlords.
Its newest Landlord Developments report for Q2 2025 reveals that 71% of landlords price tenant demand within the areas the place they’re letting properties as ‘robust’ – with 33% saying it’s ‘very robust’ and 39% ‘fairly robust’.
Regional variations are marked. Yorkshire & Humber leads the best way with 81% of landlords reporting ‘robust’ demand, 36% of them ‘very robust’, however London and the East Midlands have decrease figures at 64% and 63% respectively.
Whereas the general determine is down from 82% in Q2 2024, solely 4% of respondents chosen ‘weak’ and 18% selected ‘common’ however this cooling of the market may be defined by a interval of exceptionally excessive demand pushed by low rental provide, post-pandemic migration, and sustained stress on inexpensive housing, the report states.
Whereas ranges stay excessive by historic requirements, softer demand may have an effect on rental development, yields, and funding urge for food in some markets.
Bethan Cooke, director of Pegasus Perception, stated: “Even after an 11% drop, over seven in 10 landlords are nonetheless seeing robust tenant demand, which reveals simply how aggressive the rental market stays.
“Nonetheless, the truth that demand has eased for the primary time shortly suggests we could also be at a turning level. For landlords, this might imply much less scope for lease will increase in some areas, particularly the place affordability is already stretched. That stated, demand ranges stay far above these of 5 years in the past, and the basics of the personal rented sector are nonetheless strong.
“The query is whether or not that is the beginning of a sustained rebalancing between provide and demand, or only a short-term pause within the face of wider financial pressures. Both means, landlords and lenders might be watching intently.”
