Why a sustainable rental market is better for investors than runaway growth

December 16, 2025

The UK’s rental market is one of the most reliable and profitable in the world. It has performed strongly for decades despite a range of economic and social challenges. That stability is the key to what makes UK property so attractive.

Two years of extremely high rental growth during COVID reset expectations among investors in the UK. However, now rental growth has returned to a lower, more normal rate of growth – but is this actually better for investors?

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How much are UK rents forecast to grow in the next four years?

The UK rental market is defined by the lack of supply and overwhelming demand. Low construction rates and an increasing number of renters mean that we are expecting further growth in rents over the next four years.

The latest forecast from Savills shows that the average UK rent will go up 12% by 2030. London rental growth is going to be lower at 11.5%, and the busiest markets like Manchester city centre will see rents go up faster.

Emily Williams, Director of Research at Savills, said: “Our forecast indicates that conditions over the next five years are expected to return to more normal levels, with rents increasing at a rate between inflation and income growth.”

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How fast did rents grow during COVID?

COVID was the exception to the rule of steady growth. Between approximately October 2021 and October 2023, annual rent growth in the UK was over 10% per year. In Manchester, rents increased by 20% in 2022 alone.

There were many factors causing this, including the lack of supply, people’s need for more spacious homes and the inability of many renters to buy their own home during the pandemic. All of these reasons contributed to a huge wave of demand that pushed rents up rapidly.

Data from Zoopla at the end of 2024 shows that the average rent now is £270 higher than it was before the COVID-19 pandemic. In total, the average rent this time last year was £1,270 per month.

Figures from the Office for National Statistics show that the average rent is now £1,416 per month in England. However, the crucial point is that rental growth has returned to 5% in the last year. That is a much more sustainable rate of growth, and it tracks more closely with people’s incomes.

It is also undeniably a slower rate of rental growth – so, should investors be worried?

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Why is slower average growth better for investors?

In fact, slower growth is more sustainable, and investors should welcome it. The rent rises seen during COVID were a result of market turbulence and unique economic circumstances, but they were not sustainable.

Property investment is a long-term prospect, and investors will earn more in the long run if rental growth is affordable for a larger number of potential tenants. If rents rise 10% every year – much faster than average wages – we will soon reach a point where nobody can afford rents.

In that situation, investors will face prolonged void periods with no rental income at all. Prices will eventually be forced downwards again to avoid a complete market failure. Short-term gains will lead to long-term loss of income and a lower overall return on investment over the years.

On the other hand, average growth of 12% in the next four years is sustainable and won’t outpace the ability of tenants to pay. That will ensure consistent returns that add up to a greater profit over time.

And if you want higher than average returns, markets like Manchester city centre and central Liverpool offer faster than average rental growth. By purchasing UK buy-to-let property in these areas, investors can get the best of both worlds – faster than average rental growth in growing economies, which can sustain it for the long term.

Want to learn more about our available buy-to-let opportunities in the UK’s best property markets? Contact our team today to discover our available investments and get bespoke, strategic buy-to-let property advice.

Why a sustainable rental market is better for investors than runaway growth

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