UK Rental Market Update From RICS: Demand Up, Supply Down, Rents Still Rising
The latest RICS Residential Market Survey highlights something many investors are already seeing across the UK rental market: tenant demand is still rising while available rental stock remains limited.
For passive property investors, that matters far more than short-term housing headlines.
While much of the media focus remains on slower house sales and higher mortgage rates, the rental market is being driven by a different set of forces. More people are staying in rented accommodation for longer, fewer landlords are bringing properties to market, and surveyors still expect rents to keep rising.
That combination continues to support long-term rental property investment, particularly in affordable regional locations.
Tenant demand continues to grow
According to the April 2026 RICS survey, tenant demand increased again, recording a net balance of +14%.
At the same time, landlord instructions remained negative at -17%, meaning the supply of available rental homes is still tight.
This is one of the most important trends for investors.
When demand rises but supply remains limited, rental pressure builds. That can help support occupancy levels, reduce void periods and strengthen long-term rental income.
RICS also reported that +25% of surveyors expect rents to rise further over the coming months.
“The latest RICS figures show the rental market is still being driven by strong tenant demand and limited supply. That is a powerful combination for long-term investors focused on sustainable income. In many regional markets, the fundamentals for rental property remain very strong.”
Why the rental market remains resilient
Higher mortgage rates have made buying more difficult for many people across the UK.
As a result, more households are remaining in rented accommodation for longer, especially younger professionals and families who are delaying home ownership.
At the same time, the supply of rental property has not increased enough to meet that demand.
This imbalance is continuing to support the private rented sector across many parts of the UK, particularly in regional markets where affordability remains stronger.
For long-term investors, the key takeaway is simple: people still need quality rental homes, and supply is still struggling to keep pace.
Regional markets continue to stand out
The strongest opportunities are often found in affordable northern locations where purchase prices remain lower and rental demand is consistent.
Recent housing data continues to support this trend.
Zoopla’s latest figures showed some of the strongest house price growth coming from northern regions including the North East and North West, while rental growth has also remained strongest in more affordable areas.
ONS rental data showed UK private rents rising by 3.5% annually, with the North East recording the strongest rental inflation at 6.5%.
For investors focused on income rather than short-term speculation, these regions can offer a stronger balance between affordability, tenant demand and rental yield.
Supply remains below normal levels
Although the rental market has cooled slightly from the extreme conditions seen over the last few years, supply still remains below pre-pandemic levels.
That means competition for good quality rental homes continues in many areas.
This is particularly important for passive investors seeking stable, long-term income rather than relying on rapid house price growth.
Markets with strong tenant demand and limited rental stock are often better positioned to deliver reliable occupancy and sustainable rents over time.
What this means for Find UK Property clients
For Find UK Property investors, the latest RICS data reinforces a familiar theme.
The strongest opportunities are not always found in overheated markets or expensive southern locations. Instead, they are often found in affordable regional areas with:
- Strong tenant demand
- Limited rental supply
- Sustainable rental yields
- Lower entry prices
- Long-term housing need
The current market is increasingly rewarding investors who focus on income, affordability and long-term fundamentals rather than short-term market noise.
The Find UK Property View
David O’Neill, Operations Director at Find UK Property makes his observation on the current trends:
“The latest RICS figures show the rental market is still being driven by strong tenant demand and limited supply. That is a powerful combination for long-term investors focused on sustainable income. In many regional markets, the fundamentals for rental property remain very strong.”
Final thoughts
The latest RICS survey highlights a rental market that continues to outperform expectations despite wider housing uncertainty.
Tenant demand is rising, rental supply remains restricted, and surveyors still expect rents to increase.
For passive property investors, that creates a clearer long-term picture.
The opportunity is not about chasing quick wins. It is about owning well-located rental property in affordable markets where demand remains strong and supply stays tight.
That is exactly why many investors continue to focus on regional UK property.
