Key Highlights

As 2024 comes to a close and we look ahead to 2025, let’s delve into some rental trends we saw this year and look at what’s on the horizon for the year ahead.

Property investment is a long-term game, but staying informed about current and future trends enables investors to find the most lucrative opportunities. This year has seen significant increases in both property prices and rental figures; rental trends are the backbone of your cash flow – so always keep demand, yields, and growth in mind.

Rental Price Growth

Throughout 2024, rental prices continued to rise steadily across the UK. The average asking rent outside Greater London has now reached £1,344. This represents a 5.2% increase compared to the same period last year and marks the 19th consecutive quarter of rental price growth.

Within London, rental prices have seen a slightly smaller but still notable annual increase of 1.6%, bringing the average asking rent to £3,175. Despite the slower rate of growth compared to the rest of the UK, London remains the highest-priced rental market by a significant margin.

Autumn Budget Concerns 

In October, we heard Labour’s first autumn budget since their election earlier this year. Within this, they announced some big shake ups for fiscal policies. Although the announcement did confirm that Capital Gains Tax in the residential sector would remain unchanged, landlords are facing evolving landscapes with environmental regulations. 

Many landlords are now focussed on preparing for upcoming EPC regulations, which will require rental properties to achieve a minimum EPC rating of C by 2030. With approximately 2.9 million rental homes needing upgrades to meet these standards, an estimated £23.4 billion in investment is required. In response, savvy investors are increasingly turning to new-build and off-plan properties as a proactive way to address these challenges.

Regional Hotspots and Yields

Certain regions stand out with impressive annual rental growth, particularly Yorkshire and the Humber and the North West. In Q3 2024, the North West emerged as the strongest region for quarter-on-quarter change, with an impressive 3% increase in rental prices within just three months.

Compared to pre-pandemic data, rental demand in the UK is up 68%, whilst the stock of new homes has dipped 24%. Although this gap is narrowing year by year, the persistent imbalance between demand and supply continues to push rental yields higher, offering promising returns for investors.

Conclusion

As we move into 2025, the UK rental market continues to present both challenges and opportunities for landlords and investors. Rising rental prices, regional growth hotspots, and evolving regulations are shaping rental trends. While the demand for rental properties remains strong, the supply shortage and new environmental standards are prompting investors to adapt their strategies.

By staying informed about market trends and anticipating changes, savvy investors can navigate changing environments to uncover lucrative opportunities. Whether through upgrading existing portfolios or focusing on new-build and off-plan developments, those who act decisively will be best placed to thrive in the year ahead.

About Us 

North Property Group is a premium property investment agency and lettings agency focusing on premium UK real estate. We are a team of experts dedicated to finding you the best opportunities and guiding you through the investment lifecycle. We have in-depth knowledge of the property market and policy changes within the industry, so we can help guide and advise as the UK government unveils its new budget.

Book a free consultation with us today to start your journey of investing in off-plan UK property.