What’s Behind Britain’s Shifting Tenant Demand

What’s behind Britain’s shifting tenant demand

New data from 2025 has revealed something of a turning point in the UK rental market, with one report tracking Google search volume for rental enquiries showing that domestic demand in London is on the rise. According to the report by insurance group Hiscox, British tenants made 45,000 additional searches for houses to rent over the last two years, representing a 13% increase. Searches for flats also rose, though more modestly.

That might sound like a boost for landlords, but the picture becomes more nuanced when we dig a little deeper. And that nuance holds a lot of strategic potential for investors who pay attention.

Domestic demand rises while international interest falls

For London and other major cities, the rebound comes mainly from local renters. The same study found that international search interest dropped during the same period, with flat-hunting enquiries down 7% and house-hunting enquiries down 21%.

This shift is important because properties that once relied on overseas tenants such as students, professionals or international workers, may no longer enjoy that level of demand. Instead, the focus returns to UK-based renters. Landlords in these areas may benefit from reduced volatility in demand.

Cities dominate, but rising interest in regional towns

The data also shows that large cities continue to dominate rental interest, with cities making up the bulk of the top 15 trending locations for renters.

But there is also movement in more regional areas. Some smaller towns and centres are appearing more frequently in rental wish-lists, especially for house seekers who don’t need to be in a big city. Locations such as Warrington, Tamworth, and coastal towns like Clacton-on-Sea and Whitby feature among the rising spots.

For landlords, this suggests opportunity outside the traditional hubs. Demand is also likely to continue growing in places previously overlooked as remote working, affordability pressures, and lifestyle changes reshape working people’s choices.

A broader rental-market context

These findings from rental-search data echo larger patterns. A recent survey of landlords from the second quarter of this year found that 71% still rate tenant demand in their area as ‘strong’ even though that’s down from 82% a year ago. Average rents also continue to rise, with the latest figures showing a 2.9% increase across all regions during that same second quarter.

But demand isn’t as intense as during the pandemic years, and the number of tenants enquiring per property has fallen by as much as 4% in some regions. Meanwhile, rental supply is edging upwards as new listings rise by double-digit percentages compared with 2024.

This mix of easing demand pressure with rising supply, combined with above-average interest, is shifting the balance between landlords and tenants.

What landlords should take from this

Landlords should focus on where demand remains strong. Cities remain rental hot-spots, of course, but regional towns with lower cost of living, good transport links, or coastal appeal are gaining ground. These areas may deliver lower yield but also lower risk and could possibly have steadier long-term demand.

Also recognise the value of domestic demand. With international tenant interest down, rely more on the local rental market as domestic renters often generate longer tenancies and more stable occupancy.

Make sure to price and present properties realistically too. As supply rises and demand adjusts, overpricing risks longer voids, so ensure rent expectations reflect local market conditions.

Consider quality and location over ‘trendiness’ when seeking out opportunities for investment. Rather than chasing fashionable districts, apartments or high-end features, investors may get better value from well-located but modest properties. This is especially true for those that meet current tenant needs, namely good transport and a reasonable commute, along with reasonable rent.

Keep an eye on regional and lifestyle shifts. Remote working and hybrid jobs mean more tenants value space, affordability and quality of life over being central. Regions outside London or major cities may benefit massively from these work model shifts alone.

A cautious upside for buy-to-let 2026

Overall, the data paints a picture of a rental market recalibrating after a turbulent few years. Demand remains above long-term averages, rents continue to rise modestly, and supply is improving. For landlords ready to adapt, at least in terms of property type and regional focus, the coming months could offer stable returns and lower vacancy risk.

The boom or bust has boomed and busted. It’s settling into a more balanced rhythm, but that shift doesn’t mean opportunity is gone. On the contrary, in fact. With careful strategy, landlords and investors who respond to changing tenant demand may find this reset is exactly what they’ve been waiting for.

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