Demand in the rental sector is calming as more tenants become homeowners.  The number of tenants registering in lettings branches across the UK dropped  17% on the same time last year and is now running 28% below 2019 levels

This is according to the latest Hamptons Monthly Lettings Index, which shows that the decline in tenant registrations is widespread, with 63% of branches reporting fewer tenants registering in May 2025 compared to May 2024.

This represents the twelfth consecutive month in which tenant demand was lower than the same time last year.

The latest data reveals that for potential first-time buyers with small deposits, falling mortgage rates have pushed the monthly cost of purchasing below the cost of renting.  Those with a deposit of 10% or above is now likely to find themselves better off buying than renting.

Tenant demand has fallen 50% more in the most affluent areas than in the least affluent areas.

So far in 2025, there have been an average of 1.5 tenants registering to find somewhere to rent for each prospective first-time buyer.  This ratio has nearly halved since mortgage rates peaked in 2022 and 2023, driven by both falling tenant numbers and increased demand from FTBs.

For the first time in over a decade, Hamptons reveals that both London and Scotland have seen more first-time buyers looking to buy than tenants looking to rent.

In London, first-time buyers have accounted for 50.3% of new buyer registrations this year, with numbers up 2% year-on-year, despite a fall in demand from other buyers.

At the end of May, there were 5% more homes on the rental market than at the end of May 2024.  The number of homes available to rent has increased annually in every month since August 2022, despite a decline in new buy-to-let purchases.  The increase in supply reflects how homes are taking a little longer to let, due to weaker demand.  However, in recent months, the size of increases has dropped back to low single digits.

This slight increase in supply, combined with weaker demand, has reduced rental growth.  The average rent on a newly let property in the UK rose 1.5% over the last 12 months to £1,366 per month. This means rents are growing at a similar pace to 2013, when they rose by an average of 1.6%.  In May 2024, average rents increased by 5.1% annually, indicating that the pace of growth has declined by nearly two-thirds over the last year.

For tenants moving into a new property, rental growth remains highest in the North and the Midlands.  Meanwhile, London rents fell 0.5% on the same time last year, reducing the headline national rate of rental growth by 1.0%.  Rents in the capital now stand below where they were in June 2023.

Commenting on the latest figures Hamptons head of research Aneisha Beveridge said:

“It has taken the best part of two years for the pace of rental growth to fall from double digits down to 1.5%.  This means that rents are now rising at a rate that’s close to their long-term average, and suggests that the era of rapid rental growth is behind us for now.

“That said, rental growth is unlikely to cool much further.  While falling interest rates should take the sting out of rental growth over the next few years, landlords will likely continue to price in political risk.  Landlords are increasingly getting their heads around what the Renters’ Rights Bill will mean for them, but the way it plays out for landlords in reality will shape future investor appetite.”