The Welsh rental market is set for another year of change in 2025, with rising demand, shifting tenant preferences, and moderate rental price increases shaping the landscape. With supply still lagging behind demand, both landlords and tenants will need to adapt to evolving market conditions. Understanding rental growth forecasts, investment strategies, and affordability trends will be crucial for navigating the year ahead. 

Rental growth predictions for 2025 

• Moderate rent increases expected – After rapid growth in recent years, rental price increases are expected to slow, with an average rise of around 4%.* 

• Affordable areas seeing the most demand – Smaller towns and commuter areas in Wales are likely to see the fastest rental growth, as tenants prioritise value for money over city living. 

• Supply remains tight – While some new rental properties are entering the market, overall demand still outweighs availability, keeping prices on an upward trend. 

What landlords should expect in 2025 

Tenant demand remains strong – The lack of affordable homes to buy means more people will stay in the rental market for longer. 

Quality and amenities matter – Tenants now prioritise well-maintained, energy-efficient homes, making property upgrades an advantage for landlords. 

Rising operational costs – Changes to tax rules and property maintenance requirements mean landlords should budget carefully to maintain profitability. 

What tenants need to know 

Affordability is key – Renters are focusing on properties that offer good value, reasonable rent, and included amenities. 

More competition for rental homes – In popular areas, tenants may face higher competition for properties, meaning quick decision-making is essential. 

Location flexibility – Many renters are expanding their search beyond major cities in favour of cheaper and well-connected towns. 

Will 2025 be a good year for the rental market? 

Despite continued demand and rental price growth, the market remains challenging for both landlords and tenants. Those who adapt to changing expectations—whether by investing in quality upgrades or searching in new locations—will be in the best position. 

Get expert guidance on Wales’ rental market today 

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