Rental Market Update

Bristol steadies, Bath surges, and the national market begins to rebalance.

After several years of intense growth, England’s rental market is finally showing signs of catching its breath. Rents remain at record highs, but the runaway increases of the post-pandemic years have eased.

Across the country, supply is rising, demand is softening, and markets like Bristol and Bath are starting to move in different directions.

So, what does that mean for landlords in our region? Let’s take a closer look.

 A Cooling, Not a Collapse

Nationally, rents are still edging upwards, the average monthly rent in England now sits around £1,403, up 5.8% year-on-year. But that growth rate is roughly half what we saw in 2024.

In other words, rent inflation is cooling to more “normal” levels. After years of double-digit jumps, the market is beginning to stabilise. The result? Less frenzy, fewer bidding wars, and a more sustainable rhythm for both landlords and tenants.

Meanwhile, the number of rental homes available has risen by around 20% year-on-year across England, and by a remarkable 36% in the South West. It’s the first real sign in years that supply is catching up.

Bristol: A Market Finding Its Balance

Bristol has been one of the UK’s most competitive rental markets for years, but that tide is starting to turn.

The average rent in the city is now £1,791, up just 1.9% on last year. In fact, Bristol recorded the slowest rent growth among major UK cities in Q3 2025.

Why? A healthy flow of new rental listings, new build-to-rent schemes, and some would-be sellers choosing to let instead of sell. That’s given tenants a little more breathing room and prompted landlords to price realistically to secure good renters.

It’s a sign that Bristol’s market is maturing: still strong, but more balanced.

Bath: Demand Still Outpacing Supply

Just 15 miles away, Bath tells a very different story.

Here, rents are still climbing fast, the average rent has reached £1,761, up 9% in a year. Smaller properties, particularly one-bed flats, are seeing the sharpest increases as competition remains fierce among young professionals and students.

Despite some small improvements in supply, Bath’s tight housing stock and constant demand mean voids remain rare and rents continue to edge higher.

For landlords, Bath remains a robust, though increasingly expensive, market, where well-maintained properties rarely stay empty for long.

The Bigger Picture: Balance Returning

What’s happening locally mirrors the wider national trend: a market that’s finally re-balancing after years of landlord-favourable extremes.

Tenant demand has dropped by around 20% from last year’s peak, as more renters become buyers and affordability limits how far rents can stretch. At the same time, new investment and a rise in available homes are easing pressure.

For landlords, that shift brings both reassurance and responsibility. With tenants having more choice, presentation and compliance matter more than ever.

What Landlords Should Take Away

●      Expect steadier rents: Average growth of around 3–5% looks likely heading into 2026.

●      Focus on quality: Energy-efficient, well-kept homes will let faster and retain tenants longer.

●      Stay compliant: With the Renters’ Rights Act on the horizon, annual rent reviews and clear documentation will become standard practice.

●      Plan for sustainability: As yields normalise, reliable management and minimal voids will matter more than chasing short-term gains.

Our Take

At Personal Economy Lettings, we see these changes as healthy. The South West market is still strong, but it’s growing up. The coming year will reward landlords who take a measured, professional approach: those who invest in good maintenance, fair pricing, and proactive management.

If you’d like to talk through how the latest market shifts could affect your property or your investment strategy, we’d be happy to help.

Get in touch with Lisa for a conversation about your portfolio and what to expect over the months ahead.

 https://personaleconomypartners.com/landing/book-a-clarity-call