Zoopla reports the UK rental market is showing signs of becoming more balanced, with lower demand and a modest improvement in supply easing some of the pressure seen in recent years. While rents are still rising in most areas, the pace of growth is now much slower than during the peak of the rental boom in 2023. This suggests a market that is stabilising rather than continuing at the intense pace seen previously.

You can download the Zoopla Rental Report March 2026 using the link below:

Demand for rented homes eases as supply improves

A key factor behind this shift is falling demand for rented homes. Demand is now 14% lower than a year ago and at its lowest level for six years. Lower migration has played an important role in this change. Migration increased sharply after the pandemic, adding pressure to the rental market, but migration for work and study has since fallen back sharply.

At the same time, improved mortgage conditions have helped more renters move into home ownership. Since three-quarters of first-time buyers are renters, each move into ownership helps release another home back into the rental market. This combination of lower demand and homes being freed up has helped reduce pressure on rents, with rental growth slowing to 1.9%, down from 2.8% a year ago.

More homes are becoming available to rent

Supply has also improved. There are now 11% more homes available to rent than a year ago. This has been supported by stronger first-time buyer demand freeing up previously rented homes, as well as some sellers choosing to let their homes when they cannot sell.

Even so, the number of homes available to rent is still 23% below pre-pandemic levels. That means rental scarcity has not disappeared and rents are likely to keep rising over 2026, even if growth remains moderate.

Competition for rental homes is reducing

Competition for rental homes is also easing. The average number of enquiries per property has fallen to 4.8, compared with 6.5 last year. This means fewer renters are competing for each available home. Although this is a positive development for renters, competition remains at around double the pre-pandemic average, so upward pressure on rents has not gone away completely.

Homes are also taking longer to let, with the average time to find a tenant now standing at 20 days. Compared with the much faster lettings market of 2022 and 2023, renters now have more time to view properties and make decisions.

Rent increases are slowing, resetting affordability

Affordability is another important part of the picture. During 2022 and 2023, rents for new lettings rose much faster than household incomes, creating affordability pressures. Over the last 18 months, however, earnings have risen faster than rents, which has started to ease some of that strain. Outside London, the annual rent for a typical residential property now accounts for 33.5% of gross annual earnings for a single person. This is down from more than 35% in 2023, which was the highest level for 20 years, and is moving back towards the long-run average of 33%. Affordability remains worse in London, but it has also improved since 2023. Based on current trends, this improvement is expected to continue through 2026.

Outlook for the UK rental market

Looking ahead, the overall direction of travel is towards a more stable rental market. Rents are expected to continue rising during 2026, but at a slower pace of around 2% to 3%. Lower than expected net migration could mean rental growth turns out weaker than expected. For renters, a less competitive market and a greater number of available homes may create more room to negotiate on rents.

For landlords and the wider sector, however, the underlying supply picture remains important. The recent slowdown in rental growth is being driven mainly by a cyclical slowdown in demand, not by a lasting increase in rental supply. The number of homes in the private rented sector has changed little over the last decade, while new investment remains modest. Over the longer term, increasing the supply of rental homes remains the clearest route to improving affordability.