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For many, the cost of living and rising mortgage rates have made homeownership a less viable option and so renting has become a more feasible alternative.
For the first time since April 2023, the English region with the highest annual rent inflation rate was not London. The North East had the highest inflation, at 9.4% in the 12 months to March 2025 which is a new record-high annual growth rate for the North East
Saviiles predicts that lack of supply will continue to push up rents
High demand and low supply have been the influence behind the significant rental growth seen over the past few years. At a national level, this pattern looks set to continue with rents expected to rise above incomes again, especially as it is difficult to see where an increase in rental supply will come from in the next couple of years. As a result, rents are expected to rise faster than income growth in 2025
Strong rental growth has stretched the finances of those living in the rental sector, limiting the capacity for further increases in some markets so they expect to see more affordable markets such as in the NorthEast, to see the strongest acceleration in growth beyond 2025.
Renting out a property comes with a range of long-term benefits for landlords. When managed correctly, a property can provide a good source of income plus property prices have also increased and are predicted to continue increasing, and so a long-term landlord may also benefit from capital appreciation when they come to sell.
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