Zoopla has made its prediction for the lettings market in 2025.
It says that whilethe number of homes available to rent is now 12 per cent higher than this time last year, Zoopla doesn’t expect any big increase in the number of homes for rent over 2025.
The number of homes for rent remains below pre-pandemic levels in all regions apart from the East Midlands.
Private landlords continue to sell off rented homes at a steady pace in the face of greater regulation and higher borrowing costs, despite what have been sizable increases in rents.
Despite this, Zoopla believes that the peak of the private landlord sell-off has now passed.
It’s now a question of when market conditions look right for landlords to increase investment and expand rental supply. This is still some way off and requires lower base rates and higher rental yields.
The portal suggests that one bright spot has been more corporate investment in Build To Rent homes – but even in these instances, the pace of new development has slowed in the face of higher borrowing costs and more regulation.
Zoopla expects a continued mismatch between supply and demand with average rents for new lets to increase by four per cent over 2025 taking the annual rental cost to £15,850.
Rental growth in London and larger cities will lag behind the UK average as a result of growing affordability pressures and further modest growth in supply.
