Tenant demand for rental homes in England grew up +0.5% between Q4 2024 and Q1 2025, with West Sussex gaining the mantle of being England’s rental demand hotspot, latest research by Zero Deposit reveals.
The latest index from the tenancy deposit alternative firm shows that rental demand across England sat at 28.2% during the first quarter of 2025.
This marks a quarterly increase of +0.5%, and a -3.6% drop since the first quarter of 2024.
While the national picture shows a slight growth in demand, no less than 31 English counties saw an above average boost in demand during the first quarter of the year.
SOARING DEMAND
The Isle of Wight saw the biggest increase of all, seeing demand soar by +17.2% on the quarter. Particularly strong demand growth was also recorded in Rutland (+14.1%), Herefordshire (+8.4%), Wiltshire (+7.3%), and Gloucestershire (+7%)
Suffolk (+6.2%), Lincolnshire (+5.1%), Worcestershire (+4.8%), and Devon (+4.8%) also saw demand increase by more than +4.5%.
Despite a large proportion of England seeing good growth in rental demand, a number of counties did see rates decline.
The biggest drop was recorded in Warwickshire (-7.7%), followed by Tyne & Wear (-7.3%), Merseyside (-5.6%), and South Yorkshire (-5.6%).
RENTAL HOTSPOTS
Q1 saw West Sussex take first place as England’s rental demand hotspot with 51% of all rental listings securing a tenant.
This was followed by Suffolk (49.1%), Wiltshire (49%), the Isle of Wight (48.5%), Rutland (46%), and Somerset (45.9%).
Meanwhile, demand was at its lowest in West Yorkshire (14.1%), Nottinghamshire (15.4%), and South Yorkshire (17.3%).
CORRECT ASSESSMENT
Sam Reynolds, Chief Executive of Zero Deposit, says: “When England’s rental demand fell by more than -7% in the last quarter of 2024, some commentators suggested it showed signs that the nation’s rent crisis was rebalancing, but we were quick to point out this was far from true, and now the numbers from Q1 2025 show we were correct in our assessment.
“The market continues to suffer from a severe imbalance between supply and demand with multiple tenants wrestling over every single property that becomes available.
“Now that we’re heading into Spring and Summer, typically the market’s busiest periods, demand pressures are only going to get worse as more and more tenants look to make their next move.”
FUTURE REGULATION
And he adds: “We are seeing the results of stubbornly high house prices forcing more people to postpone their first purchases and therefore rent for longer than ever before, and also a constant lack of new supply to the rental market, particularly outside of our major cities.
“The government appears to be pushing to address supply issues with its ambitious new homes targets which, if met, can create more rental stock and more for-sale stock, thus helping ease prices in both markets.
“But with the introduction of the Renter’s Rights Bill, we may be facing another obstacle as an increased number of landlords may choose to exit the sector due to the instability created by the bill.”
