Demand in the rental sector is cooling as more tenants become homeowners, says Hamptons.
The number of tenants registering in lettings branches across Great Britain was down 17% on the same time last year and is now running 28% below 2019 levels.
The agency says this decline in tenant registrations is widespread, with 63% of branches reporting fewer tenants registering in May 2025 compared to May 2024. This marks the 12th consecutive month in which tenant demand was lower than the same time last year.
For would-be first-time buyers with small deposits, falling mortgage rates have pushed the monthly cost of purchasing below the cost of renting.
Anyone with a deposit of at least 10% is now likely to find themselves better off buying than renting, says Hamptons.
This shift has hit tenant demand in more affluent areas, in particular, where tenants are most likely to buy. Tenant demand has fallen 50% more in the most affluent areas than in the least affluent areas.
So far in 2025, there have been an average of 1.5 tenants registering to find somewhere to rent for each prospective first-time buyer.
This ratio has nearly halved since mortgage rates peaked in 2022 and 2023, driven by both falling tenant numbers and increased buyer demand from first-time purchasers.
Back in 2017, there were an average of 5.9 tenants registering in a branch looking for somewhere to rent for each would-be first-time buyer looking for somewhere to buy.
However, this ratio has been steadily shrinking, which coincides with a rising share of first-time buyers.
For the first time in at least the last decade, both London and Scotland have seen more first-time buyers looking to buy than there are tenants looking to rent.
In the capital, first-time buyers have accounted for 50.3% of new buyer registrations this year, with numbers up 2% year-on-year, despite a fall in demand from other buyers.
At the end of May 2025, there were 5% more homes on the rental market than at the end of May 2024.
The number of homes available to rent has increased annually in every month since August 2022, despite a decline in new buy-to-let purchases. The increase in supply reflects how homes are taking a little longer to let, due to weaker demand.
However, in recent months, the size of increases has dropped back to low single digits.
