The UK rental market has faced some tough and complex challenges over recent years, and many landlords are currently weighing up their options. However, recent changes to interest rates and lower mortgage rates could present some landlords with opportunities to invest and improve their cash flow. Whether you have an existing portfolio or you’re considering investing into a buy-to-let, we share the latest UK rental market news and updates for 2025.

WILL THE RENTAL MARKET IMPROVE?

Although rental growth continues, the pace has slowed and there are various factors that are reshaping the property investment landscape. Average rental prices in the UK reached £1,307 in May 2025, which is a modest monthly increase of 0.7% from April. In terms of annual growth, this is a 0.8% rise, which is lower than seen in recent years (HomeLet).

Some economists believe the rental market is stabilising after a period of exceptional growth. RICS data shows there’s still a big gap between rental demand and supply, and many expect this pattern will continue to support rental market growth. As a result, landlords might be in a better position to retain their current tenants, while still achieving reasonable returns.

The Bank of England's recent base rate cut to 4.25% (May 2025) could make borrowing more attractive for property investors. Further interest rate cuts are expected by the end of 2025, which could enhance mortgage-financed property investments. Two-year fixed buy-to-let mortgage rates have also reduced, which could offer opportunities for aspiring landlords. Lowering borrowing costs can help to improve cash flow for property investing.

However, with the new Renters Rights Bill expected to become law this summer, changes to legislation could put extra pressure on the rental market. The Bill proposes to abolish Section 21 ‘no fault’ eviction notices, while giving landlords stronger grounds for possession. Once the Bill is in force, landlords will need to get to grips with this new legislation.

SHOULD YOU KEEP OR SELL YOUR RENTAL PROPERTY?

As interest rates improve, existing landlords might choose to hold onto properties they previously considered selling. Despite the slowing down of rental market growth, this could potentially stabilise rental property supply.

If you are a landlord looking to expand your portfolio, improving mortgage market conditions could present some new opportunities. Some landlords might be able to take advantage of these better financial conditions and the ongoing gap between rental demand and supply. However, you’ll need to carry out the necessary due diligence, and stay up to date on borrowing conditions, changes to legislation, and relevant market trends.

At RJJ Developments, we help landlords and property investors source viable and profitable opportunities for rental investments. Our team are experienced in portfolio management, and we can advise you on renting and refinancing. If you’re a landlord looking for a quick sale, we might be able to buy your property, depending on the location and situation.

Are you a landlord considering your options? Please get in touch. to see how we can help.

Thank you for reading our latest blog, UK Rental Market News: July 2025.

RJJ Development