A market in motion, but still full of opportunity 

The UK rental market in 2025 is evolving. While challenges like regulatory changes and shifting tenant expectations are present, opportunities abound for landlords who adapt and stay informed. 

Rental yields: where they stand now 

Rental yields remain a key metric for landlords assessing profitability. As of late 2024, the average UK rental yield stood at approximately 5.37%, calculated based on an average rent of £1,271 and an average house price of £284,000 . However, yields vary significantly by region. Areas in the North and Midlands, such as Manchester, Liverpool, and Nottingham, often offer higher yields due to lower property prices and strong tenant demand. 

Tenant demand: still strong, but evolving 

Tenant demand remains robust in 2025, although the dynamics are shifting. According to Zoopla, there are still 12 people chasing every home for rent, down from previous years but still indicative of a competitive market . Rightmove reports that the average advertised rent outside London has risen to a new record of £1,349 per calendar month, with London rents hitting £2,698 . 

However, affordability pressures are leading to a moderation in rent increases. Rightmove predicts advertised rents will rise by 3% both inside and outside London in 2025 . 

Regulatory landscape: changes ahead 

The Renters' Rights Bill, expected to become law in 2025, aims to reshape the rental market. Key provisions include the abolition of "no-fault" evictions and the introduction of more flexible tenancy arrangements . Landlords should prepare for these changes by reviewing tenancy agreements and staying informed about new compliance requirements. 

Strategies for landlords in 2025 

• Focus on high-demand areas: Cities like Manchester, Birmingham, and Nottingham continue to offer strong rental yields and tenant demand. 

• Stay compliant: With regulatory changes on the horizon, ensure all properties meet the latest standards and that tenancy agreements are up to date. 

• Consider property improvements: Enhancing energy efficiency and offering flexible living spaces can make properties more attractive to tenants. 

• Monitor market trends: Regularly review rental prices and demand in your area to adjust strategies accordingly. 

Looking to optimise your rental portfolio? Let's discuss strategies tailored to the 2025 market