The flow of new rental properties coming onto the market has fallen at the fastest rate since the first Covid lockdown five years ago, according to the Royal Institution of Chartered Surveyors (Rics). Its July 2025 Residential Market Survey showed a 'firmly negative trend' in landlords making properties available for rent, the weakest reading since April 2020.
While demand from tenants remains steady, the lack of fresh supply is expected to push rental prices higher over the next three months. The warning comes despite a separate report from estate agent Hamptons showing that average private rents in Great Britain fell marginally in July for the first time in five years, partly due to lower mortgage rates.
The Rics report also revealed a softening in homebuyer demand, with new inquiries falling in July compared with a rise in June. Simon Rubinsohn, chief economist at Rics, said the market is 'particularly price sensitive' amid uncertainty over further interest rate cuts and the potential contents of the chancellor's autumn budget.
Tom Bill, head of residential research at Knight Frank, attributed the shrinking supply to the forthcoming renters' rights bill, which could make it more onerous for landlords to regain possession. 'This is one unintended consequence of the bill, which raises the risk of void periods,' he said.
Sarah Coles, head of personal finance at Hargreaves Lansdown, noted that the survey suggests 'the era of runaway rents isn’t over yet,' as more tenants chase fewer homes. Her firm's research found the average renting household has just £62 left at the end of the month.
