UK Rental Market Hits Record High, Driven by Increased Demand and Regional Variations

The UK rental market has just hit another milestone, with average rents in England climbing to a new record high. According to Goodlord’s latest Rental Index, as of July 2025, the average monthly rent now stands at £1,496, a clear jump from last July’s £1,470. For tenants, that’s a noticeable increase: those signing new contracts this summer are paying an additional £231 per month compared to June, which certainly sharpens the focus on affordability.

This isn’t a one-off spike. The UK rental market has been gaining momentum for some time, and the current environment remains particularly favourable for property investors seeking robust returns.

Key Drivers Behind Rising Rents

July is traditionally a peak period for the UK rental market, largely due to the influx of students and professionals relocating for education and new roles. The post-pandemic shift in working patterns has only amplified this seasonal movement, with increased numbers of tenancy renewals and relocations driving heightened market activity.

Regional Performance: North West and North East Stand Out

Drilling down by region, the North West rental market stands out with an eye-catching 42% month-on-month rent increase. The South West and North East are also seeing significant gains, up 34% and 27% respectively. This sharp regional divergence underscores the shifting demand and supply landscape, and investors are seeing particularly strong opportunities in these emerging markets.

Meanwhile, growth in London has been comparatively modest at 4%, with the South East showing a 6% rise. These figures illustrate a clear shift: the most established markets are seeing steadier growth, while secondary regions are experiencing sharper rental climbs.

Annual Growth Slows, But Opportunities Remain

While July’s monthly jump is substantial, year-on-year growth has moderated to 1.8%, down from 4% earlier in 2025. That said, select regions — most notably the West Midlands and Greater London — continue to outperform general rental investments in the UK, with annual increases of over 6% and nearly 5%, respectively. Key cities such as Manchester, Liverpool, and Sheffield remain robust, offering attractive prospects for investors focused on yield and long-term appreciation.

Void Periods Shorten, Signalling Robust Demand

Another positive indicator for landlords is that void periods have dropped significantly. The average time a property sits empty fell from 20 days in June to just 12 in July, a 40% reduction. The North West and North East saw especially dramatic improvements, with voids down by 77% and 65%, respectively. This means rental properties are moving quickly, reducing vacancy risk and supporting strong cash flows for investors.

Outlook: Strong Fundamentals, Appealing Prospects

All things considered, the UK rental market continues to demonstrate resilience and growth potential. Rising rents, shrinking voids, and strong demand in northern and midlands regions combine to create a compelling case for both new and existing investors.

For those considering entry or expansion, the data highlights particular opportunities in the North East, West Midlands, and especially the North West rental market. These regions are showing robust rental growth and sustained tenant demand, making them prime candidates for investment.

If you’re looking to capitalise on these trends, Magnate Assets is ready to help you identify the best opportunities and guide your property investment strategy for maximum returns. Let’s work together to build a resilient, profitable portfolio in today’s dynamic market.