The 2025 Rightmove Rental Price Index has provided a comprehensive overview of the rental market, highlighting key trends and insights that are crucial for both landlords and tenants. This year’s report reveals a dynamic landscape with several notable shifts in rental prices, demand, and market conditions. Let’s delve into the conclusions drawn from the 2025 index.

1. Moderation in Rental Price Increases

One of the most significant conclusions from the 2025 Rightmove Rental Price Index is the moderation in rental price increases. After years of sharp rises, the pace of rent hikes has slowed down. In 2024, average rents outside London increased by 4.5%, reaching £1,339 per month, while in London, rents rose by 2%. Looking ahead, Rightmove predicts that advertised rents will rise by 3% both inside and outside London in 2025. This moderation is a welcome relief for tenants who have been grappling with affordability issues.

2. Supply and Demand Dynamics

The balance between supply and demand has shown signs of improvement. The number of rental enquiries per property has decreased from its peak, indicating a more balanced market. In early 2024, there were an average of 19 enquiries per rental property, which has now fallen to 11. This is still higher than the pre-pandemic levels of 2019, which saw six enquiries per property. The drop in demand, coupled with a 7% increase in the supply of rental homes, suggests a calmer rental market in 2025.

3. Regional Variations in Rental Prices

The 2025 index highlights significant regional variations in rental prices. While the overall trend shows a moderation in rent increases, some regions have experienced more pronounced changes. For instance, the North East saw the highest year-on-year rise in rents, with an increase of over 8% since January 2024. In contrast, the East Midlands recorded the smallest change, with prices increasing by only 1%. These regional disparities underscore the importance of localised market analysis for both landlords and tenants.

4. Affordability Pressures

Affordability remains a critical issue in the rental market. Over the past five years, average rents have climbed by 40%, while wages have risen by only 28%. This disparity has led to renters reaching an “affordability ceiling,” where they are hitting the limits of what they can afford in monthly rent. As a result, 26% of rental properties have had their asking rents reduced, up from 23% during the same period last year. This trend indicates that landlords are becoming more flexible in their pricing to keep their properties tenanted.

5. Impact of Economic Factors

Economic factors continue to play a significant role in shaping the rental market. The ongoing imbalance between supply and demand is putting upward pressure on prices. However, the affordability constraints faced by tenants are acting as a counterbalance, leading to a more moderated increase in rents. The economic environment, including wage growth and inflation, will be crucial in determining the future trajectory of rental prices.

6. Void Periods and Market Softening

The Goodlord Rental Index, which complements the Rightmove data, provides additional insights into the rental market. It reveals that void periods have lengthened, reaching 24 days in January 2025, the longest since April 2021. This increase in void periods suggests a softening market, where properties are taking longer to rent out. Despite the rise in rents, the extended void periods indicate that tenants are negotiating more aggressively and landlords are having to adjust their expectations.

7. Confirmed vs. Advertised Rental Prices

A notable finding from the Goodlord analysis is the discrepancy between advertised and confirmed rental prices. In Q4 2024, advertised prices were significantly higher than the confirmed rental prices. For example, advertised prices outside London were £1,341 per month, while confirmed prices were £1,070 per month, a difference of 20%. In London, the gap was even wider, with advertised prices at £2,695 per month and confirmed prices at £2,046 per month, a difference of 24%. This indicates that tenants are successfully negotiating lower rents than those initially advertised.

8. Tenant Preferences and Market Trends

The 2025 rental market is also witnessing shifts in tenant preferences. There is a growing demand for longer leases, energy-efficient properties, and pet-friendly units. These preferences are shaping the types of properties that are in demand and influencing landlords’ strategies. As tenants become more discerning, landlords who adapt to these preferences are likely to see higher occupancy rates and better tenant retention.

9. Future Outlook

Looking ahead, the rental market in 2025 is expected to remain dynamic, with several factors influencing its trajectory. The moderation in rent increases is likely to continue, providing some relief to tenants. However, the ongoing supply and demand imbalance, coupled with economic factors, will continue to exert pressure on rental prices. Landlords will need to stay attuned to market trends and tenant preferences to navigate this evolving landscape successfully.

The 2025 Rightmove Rental Price Index offers valuable insights into the current state of the rental market. The moderation in rental price increases, regional variations, affordability pressures, and shifts in tenant preferences are key takeaways from this year’s report. As the market continues to evolve, both landlords and tenants will need to stay informed and adaptable to make the most of the opportunities and challenges that lie ahead.

In summary, the 2025 rental market presents a more balanced and moderated landscape compared to previous years. While affordability remains a concern, the slowing pace of rent increases and the improvement in supply and demand dynamics offer a glimmer of hope for tenants. Landlords, on the other hand, will need to remain flexible and responsive to market trends to ensure their properties remain attractive and tenanted.

By understanding these key conclusions from the 2025 Rightmove Rental Price Index, stakeholders in the rental market can make informed decisions and navigate the year ahead with greater confidence.