Hamptons has downgraded its 2025 rental development forecast from 4.5% to 1.0% throughout the UK, signalling a faster-than-expected market slowdown.
Rents on newly let properties rose simply 0.4% year-on-year throughout the UK in June, the weakest development since August 2020m with declines famous in London (-2.5%), Wales (-0.9%) and Scotland (-0.5%).
Tenant demand has softened, down 11% within the first half of 2025 in comparison with the identical interval in 2024, and 20% beneath 2019 ranges. These numbers owe a lot to falling mortgage charges which have helped renters purchase their very own properties.
Hamptons means that regardless of the short-term cooling, structural provide shortages and upcoming regulatory modifications, together with the Renters’ Rights Bill and EPC necessities, are expected to maintain upward strain on rents within the medium time period.
However, a weaker labour market outlook is expected to scale back development by 0.5 proportion factors annually. This means Hamptons now expects rents to rise 3.5% within the yr to December 2026 and three.0% in 2027.
Commenting on the newest figures and projections Hamptons head of analysis Aneisha Beveridge stated: “The rental market has softened extra rapidly than we anticipated in direction of the top of final yr. What initially gave the impression to be a London-centric slowdown has now unfold throughout the nation, with rents declining in a number of areas and development easing elsewhere.”
She added that extra prosperous renters have been turning into first-time consumers, whereas the financial slowdown was limiting what others may afford.
But Beveridge harassed that that this was not the top of the rental development story. “The structural scarcity of rental properties stays unresolved, and upcoming regulatory modifications, such because the Renters’ Rights Bill and new EPC necessities, are more likely to constrain provide additional and add to landlords’ prices.”
“A slowdown in build-to-rent growth this yr can also be expected to end in fewer new rental properties coming into the market within the coming years. These pressures will proceed to underpin rental development over the medium time period, even because the market recalibrates within the brief time period.”
