The surge in UK rental demand has concluded, with the market now settling at a more stable level, according to a new report from management platform Hello Neighbour. The report, which analyses ten years of evidence on UK rent prices, suggests that future rent trends will increasingly be influenced by tenant affordability and the rate at which existing rental homes become available, rather than further demand spikes.
Net migration, identified as a primary driver of the sharp rise in rental demand in 2022 and 2023, peaked at 944,000 in the year to March 2023 before falling to 171,000 by December 2025. This reduction, alongside tighter work visa rules and changes to student dependant restrictions, has contributed to the normalisation of rental demand. Phil Shelley, chairman of Hello Neighbour, noted that viewing requests have halved in three years but are now steady, indicating a "more normalised market."
Despite the easing of demand, significant pressures remain due to affordability and supply. The English private rented sector reached a record 5.03 million dwellings by March 2025, yet availability, particularly outside London, has decreased. This is partly attributed to tenants staying in their homes for longer, with average tenancy lengths rising by 40% from 773 days in 2021 to 1,085 days by April 2025. Concurrently, England added only 208,600 net additional dwellings in 2024-25, falling short of the 300,000 benchmark for the sixth consecutive year.
Affordability continues to be a major constraint, with average private rent consuming 36.3% of the median renting household’s income in England, exceeding the ONS’s 30% threshold. Some landlords are reportedly setting higher asking rents at the point of advertising, anticipating that in-tenancy increases will be harder to secure. In London, advertised rents rose 9.8% year on year in August 2026, marking the fourth consecutive monthly rise and the strongest reading since April 2025.