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Zoopla UK Rental Market Report – December 2023

Research and Insight December 2023
Top insights
Executive summary
The UK is past peak rental growth. We expect annual UK rental growth to halve over 2024 to 5%, the lowest growth since 2021
London will lead the slowdown with rents expected to increase by just 2% over 2024 as affordability pressures impact demand
Demand is weakening slowly off a high base, down 11% year on year, but still a third higher than the 5-year average
There are signs asking rents have overshot in some markets, evidence of growing resistance to higher rents
The supply-demand imbalance in rented housing is not going to disappear in 2024 but the market will become more into balanced
Rents in regional markets are set to out-perform where affordability is less of a constraint on rental growth
+ 9.7 %

Annual rental inflation for new lets, UK

11 %

Year-on-year change in rental demand

+ 5.0%

UK rental inflation for new lets in 2024

The UK is past peak rental growth, which will be welcome news to renters. London will lead the slowdown, acting as a drag on the UK growth rate. There remains upside for rents to outperform in regional cities where affordability is less of a constraint on rental growth, but this won’t be the case indefinitely

Rental market supply/demand imbalance starts to turn
Source: Zoopla Research
% change, 4 weeks to 3 December 2023 compared to the same period between 2018 and 2022.