Rental prices in some of the UK’s most affordable locations are rising at more than double the national rate as a chronic shortage of rental homes continues to push up costs despite demand cooling across much of the country.
According to Zoopla’s latest Rental Market Report, rents in areas where the average monthly rent is £750 or less are increasing by an average of 5% a year, compared with a national rental inflation rate of 2.1%.
The findings suggest renters in traditionally lower-cost areas are now facing the greatest affordability pressures, even as rental growth slows nationally and wage growth continues to outpace rent increases.
Carlisle leads the country for rental inflation, with rents up 9.1% year-on-year, followed by Kilmarnock at 9% and Halifax at 6.5%. Despite these sharp rises, average rents in all three locations remain around £700 per month, significantly below the UK average.
STALLED GROWTH
In contrast, several larger and more expensive markets are seeing rental growth stall or even reverse. Rents in Birmingham have fallen by 1.1%, Nottingham by 1.5% and Bournemouth by 1.7%, reflecting affordability constraints in higher-cost locations.
Zoopla said average rents across the UK are now rising at their slowest pace for several years, down from 2.6% annual growth recorded in April. At the same time, average earnings are increasing by around 4%, marking 18 consecutive months in which wage growth has exceeded rental inflation.
Competition among renters is also easing.
The average number of enquiries per rental listing has fallen to 5.6, down significantly from a peak of almost 16 enquiries per property in 2022 and the lowest level seen since 2020.
However, rental supply remains under pressure. Across every region of the UK there are still between 20% and 30% fewer homes available to rent than before the pandemic.
London remains the exception. Demand from renters in the capital has increased by 6% over the past year, supported by higher mortgage costs keeping many prospective first-time buyers in the rental sector. Average rents in London have risen to £2,206 per month.
SPLIT MARKET
Richard Donnell (main picture, inset), Executive Director at Zoopla, says: “We’re seeing a split in how different regions and cities are responding to changes in the supply and demand for rented homes.
“Our latest report shows just how fast the gap in rents is closing between more affordable regions and major cities where rents are highest. Rent inflation is more subdued across most of the UKs major cities due to already stretched affordability levels for renters”
“While demand for renting is at its lowest level for six years, low levels of new investment in private rented housing means an ongoing scarcity of homes for rent which is keeping an upward pressure on rents.”
“It’s positive that earnings continue to grow faster than rents at a national level but the experience of renters in local areas varies widely and is a challenge for lower income renters. Growing the supply of rental homes is the single most effective way to improve affordability for private renters, particularly those in traditionally more affordable areas who have the fewest choices and are facing the sharpest increases.”
INDUSTRY REACTION
Nathan Emerson, CEO of Propertymark, says: “While it is positive to see rental growth slowing nationally and wage growth beginning to outpace rent increases, these figures demonstrate that affordability pressures have not disappeared.
“In many areas where rents have traditionally been lower, demand remains strong and limited housing supply is pushing prices upwards at a faster rate than the national average.
“The underlying issue remains a chronic shortage of rental supply. Propertymark’s own member data consistently shows that prospective tenant demand continues to outstrip available stock, and despite some easing in competition, there are still far too few homes available to meet housing need.
“This is particularly evident in lower-cost locations where renters often have fewer alternatives and less flexibility when prices rise.
INCREASED INVESTMENT
And he adds: “To improve affordability and provide greater choice for renters, we need to see increased investment in the private rented sector, greater confidence among existing landlords to remain in the market, and a sustained increase in the supply of homes available to rent.
“A healthy and well-supplied rental market benefits everyone by offering greater stability, increased choice and more sustainable rental growth over the long term.”
SUSTAINABLE RHYTHM
Julie Ford, Property Expert and Founder of Lettings Advice Service, says: “The rental market is settling into a more sustainable rhythm, with enquiries per property easing far below the recent peak in demand.
“This isn’t a sign of falling demand, tenants still need homes, but many are maybe choosing stability under the new Renters Rights Act, reducing churn rather than reducing need.
“For renters, act fast but stay realistic. Good properties move quickly, but renters should still take time to understand total monthly costs, including utilities and council tax.
“It’s also important to get your paperwork ready early. Having references, ID and proof of income prepared can help you move quickly in a competitive market and have a holding deposit ready to transfer.
“For landlords, reviewing your property regularly is important. Staying aligned with local market trends helps ensure the property lets quickly.
“It’s also important to present the property well to attract higher quality tenants. Fresh paint, clean spaces and small repairs can significantly reduce void periods.”
NOT ENOUGH HOMES
Marc von Grundherr, Director of Benham and Reeves, says: “While rental growth has slowed nationally, the market’s core problem remains unchanged, there simply aren’t enough homes available to rent.
“That’s why we’re now seeing some of the strongest rental growth in areas that were traditionally considered more affordable, as tenants compete for a limited pool of stock.
“London continues to be an exception.
“Demand is still rising, higher mortgage costs are keeping many would-be buyers in the rental sector for longer, and that continued pressure is helping to push rents higher despite already elevated rental values.”
CONSTRAINED SUPPLY
Roma Sharma, Managing Director of Rushbrook & Rathbone, says: “Demand may have eased from the frantic levels seen in recent years, but supply remains far too constrained to deliver any meaningful relief for renters.
“As a result, rents continue to climb, particularly in markets where tenants have fewer alternatives.
For landlords, the focus is increasingly shifting from chasing rental growth to retaining good tenants.
“In a market where affordability remains stretched, well-maintained homes, proactive management, and minimising void periods are becoming more important than ever.”
RESILIENT DEMAND
Sim Sekhon, Group CEO at Propoly, says: “Zoopla’s latest figures are a reminder that while rental demand remains resilient, the days of letting agents being able to rely on market momentum alone are fading.
“With rental stock still well below pre-pandemic levels and demand becoming more balanced, agents are operating in an environment where every landlord instruction is increasingly valuable. The focus is shifting from simply managing volume to delivering efficiency, speed and service quality.
“As the market becomes more nuanced across different regions, success will increasingly depend on operational efficiency and the intelligence layer sitting around the tenancy lifecycle. Compliance, workflow automation, and risk intelligence are helping agents reduce friction, improve decision making and deliver a more consistent experience for landlords and tenants.”
DEPOSIT ALTERNATIVES
Sam Reynolds, CEO of Zero Deposit, says: “While national rental inflation is beginning to ease, new data from Zoopla suggests affordability pressures are far from over for renters.
“Rent growth continues in many traditionally more affordable areas, while a shortage of available homes is keeping competition for properties high.
For many renters, it’s not just the monthly rent that’s the challenge. The upfront cost of moving remains a significant hurdle. Even with reforms to rent-in-advance practices, deposits, initial rent payments and moving costs can still amount to thousands of pounds at the start of a tenancy.
“At a time when renters are being asked to stretch their budgets further, the industry must continue looking at ways to remove unnecessary barriers to tenancy.
“Deposit alternatives can free up valuable cash at the start of a tenancy, while rent guarantor products that remove the need for a personal guarantor can open up access to housing for people who may otherwise struggle to secure a home, particularly students, international renters and those without family support.
“With rental supply still 20-30% below pre-pandemic levels across the UK, the balance between improving access for tenants and maintaining confidence for landlords remains a central issue as the market continues to evolve.”
