As more tenants become homeowners, demand in the rental industry is calming. The number of registered tenants in UK rental branches fell 17% last year and is now below 28% in 2019
This is according to the latest Hampton Monthly Lease Index, which shows that the decline in tenant registrations is widespread, with 63% of branches reporting that in May 2025 tenants registered in May 2025 compared to May 2024.
This represents a twelfth consecutive month of tenant demand compared to the same time last year.
The latest data suggests that for potential first-time buyers, a drop in mortgage interest rates has lowered purchase fees than the monthly expenses of rental costs. Those with a deposit of 10% or more may now find themselves better than rent.
In the richest areas, tenant demand fell by 50% in the richest areas.
So far, by 2025, there are an average of 1.5 tenants registered, looking for places to rent for every potential first-time buyer. The ratio has almost halved since the mortgage rate peaked in 2022 and 2023, due to a decline in tenant population and an increase in demand for FTB.
For the first time in a decade, Hampton revealed that both London and Scotland have more first-time home buyers than tenants who want to rent.
In London, first-time buyers accounted for 50.3% of new buyer registrations this year, up 2% year-on-year, despite the decline in demand from other buyers.
As of the end of May, homes in the rental market were 5% higher than those in the end of May 2024. Since August 2022, the number of homes available for rent has increased annually, although new purchases have dropped. The increase in supply reflects the longer the house takes due to weak demand. However, the increase has dropped to low unit counts in recent months.
A slight increase in supply and weaker demand increase, rent growth decreased. The average rent for new rental properties in the UK has risen by 1.5% to £1,366 per month in the past 12 months. This means rent growth is similar to 2013, when they rose by an average of 1.6%. In May 2024, average rents increased by 5.1% per year, indicating that the growth rate of growth has dropped by nearly two-thirds last year.
For tenants entering new properties, rent growth remains the highest in the northern and central regions. Meanwhile, rents in London fell 0.5% during the same period last year, reducing national rental growth by 1.0%. Rents in the capital are now below the June 2023 location.
Aneisha Beveridge, director of Hampton Research, commented:
“It has been two years in two years as rent growth has dropped from double digits to 1.5%. This means that rents are now rising at a rate close to their long-term average and suggests that the era of fast rental growth is temporarily behind us.
“With that being said, rent growth is unlikely to cool down further. While lower interest rates should reduce rent growth in the coming years, landlords may continue to price at politically risky prices. More and more landlords are shaping future investors around what the tenant’s rights bill means to them, but actually shaping future investors for landlords.”
