Market conditions for renters across the United Kingdom have reached their most favourable point in six years, according to a comprehensive new report from property website Zoopla. The analysis reveals a significant cooling in competition for rental properties, marking a notable shift from the intense peak experienced during 2022 and 2023.
Declining Competition and Balanced Market Dynamics
Zoopla's data indicates that the average number of inquiries per rental property fell to just 4.8 in February 2026, a substantial decrease from 6.5 recorded during the same month last year. This figure represents the lowest level of competition for February since February 2020, when approximately 4.2 inquiries were made per home.
Richard Donnell, executive director at Zoopla, stated: "The rental market is moving back towards balance as demand cools and more homes become available to rent. Renters are facing less competition for homes and slower rent increases than in recent years."
Regional Variations in Rental Growth
UK rents for new lettings increased by 1.9% over the year to January 2026, reaching an average of £1,319 per month nationwide. However, this growth is not uniform across the country.
The report highlights that rental growth remains stronger in more affordable northern markets, where rents are generally lower. Cities such as Liverpool, Newcastle, and Glasgow are still recording significant increases ranging from 3% to 4.6% annually.
Zoopla anticipates that rents will increase by approximately 2% to 3% on average across the UK throughout 2026. Their rental market index is based on asking rents and adjusted to reflect achieved rents in practice.
Structural Changes in the Private Rented Sector
Parallel calculations from property firm Savills reveal significant structural shifts in the UK housing market. The value of the UK's private rented sector fell by £48 billion in 2025, while the value of owner-occupied housing stock increased by £185 billion during the same period.
Lucian Cook, head of residential research at Savills, explained: "Over the past 25 years, we've grown accustomed to a story of the private rented sector expanding at the expense of people's ability to get onto the housing ladder. But while deep-seated housing challenges remain, lighter regulation in the mortgage market and tighter oversight of the private rented sector are gradually beginning to shift that narrative."
Supply Challenges and Professionalisation
Despite the improved conditions for renters, significant challenges remain regarding housing supply. Zoopla notes that supply remains well below pre-pandemic levels, which continues to impact long-term affordability for UK renters.
Donnell added: "Increasing the number of rental homes remains key to improving affordability for UK renters over the long-term."
Tom Bill, head of UK residential research at Knight Frank, pointed out regional disparities: "More balance has returned across the UK but in the capital, where renting is twice as common, there is still a notable lack of supply in many areas that is pushing rents higher."
Landlord Trends and Market Professionalisation
The private rented sector has experienced three consecutive years of value contraction, with Savills calculating a total reduction of £79 billion since 2022. Increased house prices have failed to offset the loss of rental stock during this period.
Cook elaborated on the changing landscape: "Changes in tenancy legislation, higher operating costs and increased mortgage rates have prompted many private landlords to reassess their portfolios. Larger landlords, better equipped to absorb added costs and requirements, have taken on some of this stock, contributing to a more professionalised private rented sector."
Nathan Emerson, chief executive of property professionals' body Propertymark, reported concerning trends: "We currently have a rental landscape where demand for properties continues to outstrip available stock. Propertymark members report a near 7% increase in the number of landlords who have chosen to sell their properties year-on-year."
Regional Rental Data Highlights
Zoopla's detailed regional analysis for January 2026 reveals significant variations across the UK:
- Northern Ireland showed the strongest annual growth at 8.4%, with average rents reaching £831
- London maintained the highest average rent at £2,187, despite relatively modest growth of 1.7%
- Liverpool recorded substantial growth of 4.6%, with average rents reaching £915
- Birmingham and Nottingham experienced slight declines of 0.7% and 0.8% respectively
- The South East reported average rents of £1,397 with 1.9% growth
- Scotland's average rent reached £878 with 1.8% annual increase
This comprehensive data suggests that while the rental market is becoming more balanced nationally, significant regional variations persist, with some areas experiencing continued strong growth while others show signs of stabilisation or slight decline.
