After three years of rapid growth, the UK rental market is starting to stabilise. According to Zoopla’s latest data, average rents rose 2.8% in the year to June 2025 — a slower pace than in previous years, but still a healthy return.
When you look at the bigger picture, the numbers are even stronger. Cumulatively, rents are up 21% since 2022. Capital values have also climbed, especially in areas where supply is limited and tenant demand remains high. For landlords, this mix of stable rental income and rising property values offers an ideal moment to take stock.
Rents are rising, but more steadily
Zoopla’s report shows a marked shift from the post-pandemic surge in rents. That’s not a bad thing. Sudden price hikes aren’t always sustainable, and they can lead to increased voids if tenants are priced out. A 2.8% annual rise is more manageable for renters and more sustainable for landlords looking to avoid churn.
The three-year gain of 21% gives landlords a strong position. With rent levels now stabilised at a higher base, ongoing income is more predictable and easier to plan around.
Supply is still tight
Demand for rental homes continues to exceed supply in many areas. And with fewer new landlords entering the market, there’s little sign that supply will increase significantly anytime soon.
That imbalance is helping to support yields even as rental growth slows. In some regions, particularly outside London, landlords are still achieving strong gross yields of 6% to 9% depending on property type and location.
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Capital growth boosts long-term returns
Rental income is one part of the picture. But don’t forget capital appreciation. Over the last three years, house prices have risen steadily in many UK regions, especially in popular commuter towns and emerging regeneration areas.
Landlords who bought pre-2020 may have seen 20%+ increases in property value. That makes refinancing more viable and gives flexibility for portfolio expansion, home improvements, or simply releasing cash.
Review your mortgage terms
Many landlords are sitting on mortgages agreed during low-interest periods. If your deal is due to expire soon, or if you’re on a variable rate, it could be time to shop around.
Fixed mortgage rates have started to ease again. A new deal could save you money or allow you to release equity, especially if your property’s value has increased over the last few years.
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Consider refinancing to expand or improve
Refinancing doesn’t just help with repayments. It can also unlock capital to grow your portfolio or invest in property upgrades that boost rental income.
For example, improving EPC ratings, adding home offices, or converting unused space can increase rent while reducing voids. In a competitive market, tenants are looking for quality and energy efficiency.
Think strategically about location
With some regions now offering higher yields than traditional hotspots, it may be time to diversify geographically. The Midlands, North East and Yorkshire all offer opportunities for landlords to achieve better returns with lower purchase prices.
Use this summer to assess where your properties are located and whether they still meet your goals. Could you sell one underperforming unit and buy two in a growth area?
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Evaluate performance, not just price
Regular reviews of your portfolio help you stay profitable. That means looking beyond the headline rent and assessing things like:
- Net yield after expenses
- Void periods
- Maintenance costs
- Tenant reliability
If one property is underperforming, it might be better to sell and reinvest in a better location or property type.
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Understand tenant trendsÂ
Tenants are looking for flexibility, energy efficiency, and value. Rents have gone up, but so have tenant expectations.
Here’s what’s driving demand this year and next:
- Energy-efficient homes (EPC C or above)
- Good broadband for hybrid work
- Proximity to green spaces and transport
If your property doesn’t meet these needs, small changes could help you stay competitive.
Stay ahead of regulations
Landlord rules and tax policies are changing fast. From upcoming EPC targets to new rental reform legislation, it’s important to keep your portfolio compliant.
Now is a great time to take stock and ensure your paperwork, certifications, and letting strategy are all up to date.
Get expert support from Hunters
Our lettings specialists have a deep understanding of both the local market and the national picture. Whether you own one property or a dozen, we can help you assess performance, explore finance options, and plan your next steps.
