Number of homes to rent down 20% on pre-pandemic levels

The supply of rental homes is still unable to meet demand, with new data showing figures are down 20% on pre-pandemic levels. 

The statistics come from property portal Zoopla, with the findings echoing the NRLA’s arguments that while rental supply is increasing, it is failing to keep up with demand. 

In the report, which covers the 12 months to April 2025, Zoopla explains that while there are now 17% more homes available than there were 12 months ago, with demand 16% lower than the previous year, that demand is still more than 60% higher than pre-pandemic levels. 

And while this has manifested itself in lower rental growth, with average rents for new tenancies up by just 2.8% compared to 6.4% the previous year, those on lower incomes are still struggling, with the average monthly rent now hitting £1,287. 

It explains: “The reality is that rental supply remains 20% below pre-pandemic levels.  

“While the pace of rent increases has slowed, renters still face strong competition for rented homes, especially those on lower incomes with little hope of being able to buy a home.” 

How have the changes come about?  

The analysis suggests lower levels of migration for work and study is one factor, following a spike in 2022-2023. Indeed, the ONS has reported a 50% decline in net migration in 2024, although levels of migration remain above the long run average. 

Also, mortgage rates have stabilised, and affordability tests changed, both of which are improving access to mortgage finance for first-time buyers – most of whom are moving into their first home from the rental market. 

What does this mean for landlords and tenants? 

Improved prospects for tenants at the upper end of the rental market are likely to have an impact on demand in that area, but early suggestions are that an improvement in the economic climate has also seen more landlords start to buy. 

That said there are still huge disparities when it comes rental growth across the country. 

On a local level rents are rising most quickly in what are traditionally more affordable towns within commuting distance of bigger cities. Wigan, close to Liverpool and Manchester, tops the list at 8.8% growth, whereas rents in Leeds and parts of London have fallen on last year’s figures. 

What is clear is that, despite the balance of supply and demand moving in the right direction, there are still nowhere near enough rental homes available, with those renting at the lower end of the market hardest hit. 

Indeed, recent figures from Savills suggest a million extra homes to rent will be needed by 2031 to meet demand. 

What needs to happen? 

With this bigger picture in mind, we are calling for the introduction of positive taxation policies and a pragmatic approach to legislation change to encourage landlords to continue renting property in the sector and to encourage investment in new rental housing. 

Change is coming, in the form of the Renters’ Rights Bill and proposed new Minimum Energy Efficiency Standards (MEES), the latter expected to put increased financial pressures on hundreds of thousands of landlords across the country. 

What we need to do now is build on the incremental improvements we are seeing, to encourage a thriving private rented sector where tenants can access comfortable, affordable rented housing in the places they want to live. 

More information 

• To read NRLA Chief Executive Ben Beadle’s blog on the issue click here. 

• The Zoopla report can be accessed here.