14/02/2025
February 2025 Rental Market Update: What Landlords Need to Know Now
If you’re a landlord in today’s market, you’re probably wondering: What’s next? The start of 2025 has brought a mixed bag of opportunities and challenges, and the latest RICS UK Residential Market Survey reveals some eye-opening trends that every landlord should be aware of.
Tenant Demand is Holding Steady - For Now
After a period of intense competition for rental properties, demand from tenants appears to be stabilising. The survey shows that tenant demand has slipped, down to a net balance of +2% from +18% in the last quarter. While this may seem like a slowdown, it’s more of a market correction than a collapse.
The good news? There’s still strong demand in key areas, particularly for well-maintained properties in desirable locations. If you’re a landlord with a high-quality rental, you won’t struggle to find tenants.
Landlord Exodus: A Shrinking Supply of Rental Properties
One of the most concerning trends for tenants - but a potential opportunity for landlords who stay in the game - is the continued decline in new landlord instructions. The survey shows a -19% net balance in new rental listings, reflecting a persistent trend of landlords selling up and exiting the market.
Why? Rising regulation, increasing taxation, and uncertainty around the Renters' Reform Bill are pushing many small landlords to reconsider whether it’s worth staying in the sector. This means that those who do remain could benefit from less competition and continued upward pressure on rental prices.
Rental Prices Are Still Climbing
Despite the dip in tenant demand, rents are expected to rise further in the short term, with a net balance of +23% of survey respondents predicting increases. This is lower than the previous quarter (+32%), but still signals a strong market for landlords.
The takeaway? If you’re thinking about expanding your portfolio, this could be a good time to invest. With fewer properties available and demand still present, well-positioned landlords can take advantage of rising rents.
Is Now the Right Time to Buy More Property?
Interestingly, while the sales market is relatively flat right now, sales volumes are expected to increase in the coming months. This could mean more investment opportunities for landlords looking to acquire new properties at competitive prices. However, the key is buying smart - focusing on locations where rental demand remains strong and ensuring the numbers add up.
What Should Landlords Do Next?
If you’re already a landlord, this is the time to:
âś” Review your portfolio - Are your rental properties performing as well as they could be?
âś” Stay informed about legislative changes - Understanding upcoming reforms will help you plan ahead.
âś” Consider strategic investments - With supply shrinking, well-placed rental properties could see strong returns.
âś” Work with a knowledgeable lettings expert - Regulations are tightening, and professional management is more valuable than ever.
Thinking of letting your property or expanding your portfolio? Get in touch with us today. We’re not just agents - we’re landlords too, and we treat every one of our clients' properties with the same care as we do our own properties. Let’s chat about how we can help you succeed in 2025.
Book a landlord consultation here (ÂŁ97):
https://calendly.com/knightpm/landlord-consultation
đź“ž 01992 308181
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Source: RICS Residential Market Survey Janaury 2025
