Demand among renters has fallen by 14% over the last year, while the number of homes available for rent has increased by 11% over the same period, Zoopla reveals.

Zoopla’s latest rental market report show the result has been less competition between renters with 4.8 enquiries per property, down from 6.5 a year ago.

The UK property website says this is clear evidence of the rental market becoming more balanced after a peak in competition for rented homes seen in 2022 and 2023.

It suggests improving conditions in the mortgage market for first-time buyers and a continued decline in migration into the UK for work and study are the primary drivers of lower demand for rented homes.

With three-quarters of FTBs coming out of the rental market, more favourable conditions in the mortgage market have boosted FTB numbers, reducing demand for rented homes.

Zoopla notes that this has helped to free up the number of homes for rent which explains the growth in supply.

However, the shift is not just from FTBs, with this increase also stemming from would-be sellers deciding to place their properties into the rental market.

The changing dynamics of supply and demand also mean that homes are taking longer to rent.

On average, finding a tenant now takes 20 days, which is a week longer than 2022’s peak of 13 days.

Meanwhile, the latest data found that less competition for rented homes has slowed rental growth for new lets to 1.9% over the last year, down from 2.9% a year ago.

Average earnings have continued to increase at a faster rate than rents for the last 18 months which is also helping to improve affordability for renters.

The annual rent for the average property outside of London is now 33.5% of the gross annual income for a single person.

This is an improvement from 2023 where the ratio was highest in 20 years at 35%.

Meanwhile, rental growth remains stronger in the more affordable markets in Northern England and Scotland, with certain cities seeing increases of 3% to 4%, as demonstrated by Liverpool and Newcastle recording growth of 4.6% and 4.5% respectively.

In contrast, several cities across the Midlands and Southern regions are seeing lower or even negative price growth, with Bristol growing at 0.8%, Cambridge at just 0.1%, and the likes of Birmingham and Nottingham actually falling by 0.7% and 0.8% respectively.

In London, rents are growing at 1.7%, with the average rent now sitting at £2,187.

Zoopla executive director Richard Donnell says: “Market conditions for renters are the best they have been for 6 years. The rental market is moving back towards balance as demand cools and more homes become available to rent.”

“Renters are facing less competition for homes and slower rent increases than in recent years. Localised changes in demand and supply are resulting in rents falling in some cities but this will be only a short lived trend.”

“The rental market is moving back towards balance as demand cools and more homes become available to rent. Renters are facing less competition for homes and slower rent increases than in recent years.”

“However, supply remains well below pre-pandemic levels, which means increasing the number of rental homes remains key to improving affordability for the UK renters over the long term.”

Also commenting, Propertymark chief executive Nathan Emerson says: “The rental market continues to bring challenges that are tightly aligned to both fundamental economic pressures and new influence from updated legislation.”

“We are witnessing some of the biggest changes in well over 30 years, with the introduction of additional consumer protections, plus a modified taxation framework for landlords.”

“We currently have a rental landscape where demand for properties continues to outstrip available stock. Any reported uplift regarding additional rental properties being available must closely acknowledge the scenario of there still being intense pressure on supply.”

“In addition, when looking at the latest data available, Propertymark members report a near 7% increase in the number of landlords who have chosen to sell their properties year-on-year.”