Five Months of Rising UK Rents Pave the Way for a Hot Summer Rental Market

The UK rental market remains robust, with rents rising for the fifth consecutive month in May, according to the latest Goodlord Rental Index. This persistent growth signals a strong rental market for property investors, especially as we approach the peak summer season, traditionally marked by a "summer surge" in rents.

Key Insights:

• Average Rent for New Tenancies: In May 2025, the average rent for a new tenancy rose to £1,226, marking a nearly 1% increase from April. This is the highest rent recorded since October 2024.
  
  
• Regional Trends: The North East saw the highest increase, with rents climbing by 2.2% month-on-month, followed by the East Midlands with a 1.8% rise. Rents increased across most regions, except the South West, where rents fell by 0.6%.
  
  
• Year-on-Year Growth: Rents are 3.7% higher than May 2024, although the pace of increase has slowed slightly compared to previous months. April’s increase was 4.2%, and March saw a 4.6% rise.
  
  

Seasonal Surge Ahead

The increase in rental prices in May could be the start of the seasonal "summer surge," a time when rents typically reach their highest point of the year. Goodlord's CEO, William Reeve, suggests that while the pace of year-on-year increases has slowed slightly, the demand-supply imbalance in many regions continues to support rising rents. With the summer months approaching, it's expected that the rental market will experience further price hikes, possibly breaking records.

Regional Variations in Rental Demand

While rents are rising in many areas, the rental market's dynamics vary across the country:

• Shorter Voids: In the East Midlands, North West, South East, and South West, properties are being let out faster, with void periods (time between tenancies) shortening due to increased demand.
  
  
• Longer Voids: However, the West Midlands and Greater London are seeing longer void periods, with vacancies rising by 53% and 19%, respectively, as demand softens in those areas.
  
  

Tenant Salaries vs. Rent Increases

In May, tenant salaries saw a slight dip, with the average wage falling by 2.5% to £37,676, down from £38,629 in April. Despite a 1.57% increase year-on-year, tenant income remains below inflation in rental costs, which could put further pressure on renters and increase demand for more affordable rental properties.

What Does This Mean for Property Investors?

For investors, these trends offer multiple opportunities:

• Rising Rents: With rents continuing to increase across most regions, investors can expect higher yields from their rental properties, especially in high-demand areas like the North East and East Midlands.
  
  
• Supply Shortage: The ongoing supply issues in the rental market, coupled with regulatory uncertainties such as the Renters' Rights Bill, are likely to continue putting upward pressure on rental prices. This could benefit investors who already own properties or are looking to invest in high-demand areas.
  
  
• Record-Breaking Summer: As we approach the summer months, the likelihood of rent records being broken increases, providing property investors with excellent growth potential in the coming months.
  
  

Conclusion: A Strong Investment Opportunity

Despite the challenges tenants may face with rising rents and increasing costs, the current market conditions present a lucrative opportunity for property investors. The ongoing demand for rental properties, coupled with high rental yields, makes this a prime time to invest in the UK property market.

At Magnate Assets, we specialise in helping investors identify and secure properties that offer strong rental yields and long-term growth potential. Whether you're looking to add to your existing portfolio or enter the UK property market, now is a great time to act.

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