Market Outlook: Climbing Rental Yields

Over the past five years, average gross rental yields across England and Wales have consistently increased, reaching a peak of 7.2% in February 2025, compared to 6% in 2020. This upward trend is evident across all regions, with the North West experiencing the most significant rise from 6.1% to 7.8%. The primary driver behind yield growth is rental inflation surpassing house price inflation, as average rents have surged by 44% over five years, whereas property sales prices have risen by 20%. Flats now yield an average of 7.4%, a sharp increase from 5.4% in 2020, while houses yield 5.7%, up from 5.1%.

Despite these high gross rental yields, increasing regulatory pressures have posed challenges for landlords. Nevertheless, 71% of landlords intend to maintain their property portfolios over the next year, an increase from 66%, while 9% plan to expand. These figures are based on data from Dataloft by PriceHubble and the Land Registry, with calculations derived from a rolling 12-month basis of average sales and rental prices on a per-square-foot basis.

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The Rise Of Co-Living

News / news centre

In a world of constant innovation, long-established domestic arrangements are fading, and modernist living is taking a step forward. The latest idea of “co-living” has emerged, described as “large-scale purpose-built shared living developments of at least 50 units” by The London Plan. Co-living presents an alternative to traditional flat shares, showcasing a structured yet flexible approach to shared living, incorporating additional services and amenities, with leases requiring a minimum stay of three months.

Whilst initially assumed to only attract younger demographics, with statistics showing an average resident age of 28 years old, co-living debunks such assumptions, having 20% of occupants over 35. With constant room for improvement, the potential for age-specific developments is expanding, with the ability to cater to varying demographic needs. Beyond affordability, co-living is valued for its convenience, flexibility, and a strong sense of community.

Moreover, co-living plays a significant role in addressing the growing housing demand, with each unit contributing to broader availability. It also serves as a solution to long-term housing challenges, with 70% of residents planning to stay for a year or longer. This evolving model reflects shifting preferences in urban living, emphasizing shared experiences and adaptable lifestyle solutions.

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Market outlook: More modest rates of rental growth ahead

News / Cyril Osei-Gyamfi

After years of high rental growth, the pace of increases in achieved rents for new market lets is slowing, with some markets experiencing this deceleration more rapidly than others.

A key factor influencing this trend is affordability, which constrains further growth where financial strain is evident. In London, for example, affordability has reached just above 32%, contributing to a significant slowdown in rental growth from 9.0% a year ago to 1.7% currently.

Additional market indicators, such as data from RICS, suggest a normalisation in both demand and supply levels, particularly for demand, which had been elevated in recent years. As a result, rental growth is expected to stabilise, with an average annual increase of 3.4% projected over the next five years.

With reduced pressure in the market, rental turnover may rise, as previous tight conditions led many renters to renew existing leases rather than move. This shift towards more modest growth reflects a broader market adjustment in response to affordability constraints and easing demand.

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Renters are putting down roots

News / Cyril Osei-Gyamfi

Renter behaviors are shifting significantly, with renting no longer seen solely as a temporary phase before homeownership but increasingly becoming a long-term lifestyle choice. As tenants establish deeper connections with their rental properties, landlords are adapting to meet these evolving expectations. A substantial 73% of landlords are open to renters personalizing their homes, reflecting a growing flexibility in property management. Additionally, 34% of landlords collaborate with renters to approve decoration plans, further enabling tenants to create spaces that feel truly their own. Moreover, 20% of landlords involve renters in selecting tradespeople, granting tenants a greater sense of agency over maintenance and improvements. These trends indicate a progressive transformation in the rental market, where both landlords and renters are fostering more cooperative and accommodating relationships, ultimately redefining the traditional dynamics of renting.

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What local amenities are important to you?

News / Leigh Thomas

Proximity to local amenities is an important or very important consideration when choosing a rental home for over 75% of renters (Dataloft, Property Academy, 2021). But how are these considerations reflected in rental values?
Taking five ‘location features’ commonly used to describe properties on the market, we calculated which of them had had the greatest influence on rents achieved since the market reopened following the Covid-19 pandemic.
For renters, being close to an ‘outstanding’ Ofsted rated primary school or a public park had less influence on values than proximity to a town centre. Overall, proximity to a large town centre had the biggest impact.
There were significant differences between regions. The influence of a large city is not surprising in Greater London but was also strong in Yorkshire and the Humber. Being close to a station was a major factor in the East of England and North East but only in the East Midlands did proximity to an outstanding rated primary school stand out as a strong influencer for renters. Source: DRMA, Ordnance Survey, Open Street Map

Thornton Heath is a district of Greater London, England, within the London Borough of Croydon. It is around 1.5 miles north of the town of Croydon, and 7.2 miles south of Charing Cross.
We are lucky to have a number of train stations that are easily accessible from Thornton Heath such as Selhurst, Norbury, East and West Croydon, as well as Thornton Heath itself which is on the London Victoria branch of the Brighton Main Line. The large majority of the aforementioned stations are within a saunter of the High Street, or just a short bus ride away.
Croydon University Hospital, known from 1923 to 2002 as Mayday Hospital and from 2002 to 2010 as Croydon Hospital, is a large NHS hospital in Thornton Heath run by Croydon Health Services NHS Trust. It is a District General Hospital with a 24-hour Accident and Emergency department, with the hospital based on a 19-acre site to the north of central Croydon.
Along the high street, where the Olympic torch was carried in 2012, there is a modern, well-equipped Leisure Centre which recently underwent multi-million-pound refurbishment. Thornton Heath formerly had a Non-league football club, Croydon Athletic, which played at the Keith Tuckey Stadium; but the club ceased to exist at the end of the 2010–11 season. In 2012, fans of the club formed AFC Croydon Athletic, which plays at the Mayfield Stadium. In 2015 the club competed in the Southern Counties East League.
Thornton Heath is also home to the historic rugby club Streatham-Croydon RFC founded in 1871. Their grounds and clubhouse are located in Frant Road off Brigstock Road.
Thornton Heath is also home to a number of large supermarkets such as Sainsbury’s, Iceland and Tesco Superstore which is open from 11 pm Monday to Saturday and 5 pm on Sunday. If you are seeking something delicious to eat there is a variety of eateries to choose from with delicacies from a host of different cultures.
All of these things, along with some affordable Victorian homes, make Thornton Heath a very popular location with renters and home buyers alike.
Leigh Thomas – Truuli Property Expert

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How long are homeowners or renters staying in thier homes?

News / Leigh Thomas

While we wait for the 2021 census housing data we look to the newly published 2020/21 English Housing Survey data to help us understand the changing relationship we have with our homes since the last census.
Since 2011/12, owner occupiers have seen a drop in their length of tenure, from an average of 17.1 years in their accommodation to 16 years in the new 2020/21 survey results.
In contrast, private renters have increased their tenure length, increasing from an average of 3.8 years in 2011/12 to 4.2 years in 2020/21.
This slight swing to longer private tenancies comes amidst a new cost-of-living crisis where the English Housing Survey reports 52% of private renters feeling that they are unlikely to be able to afford to buy a home. In 2011/12, this figure was 41%. Source: Dataloft, DLUHC English Housing Survey 2021/22 and 2011/12

There can be several personal and/or economic reasons why people move homes such as change of employment, children’s schooling, family growth or even the cost of living crisis many currently find themselves in.
Within the Thornton heath area, mature homeowners usually stay in their homes for between 12 to 15 years. Homeowners in their thirties appear to move more often; normally within five to ten years, mainly due to a family expansion. On occasion, these homeowners move to be closer to retired parents to gain assistance with childcare.
The majority of first-time buyers are required to save up longer for a deposit to buy and in turn, are engaging in longer tenancies. This has seen a boost to the rental market where we are also noticing a lot more properties becoming available for rent.
With interest rates rising along with the cost of living it remains to be seen whether this creates new trends for the number of years homeowners occupy their homes, and also whether these factors continue to contribute to the rental sector.
If you are considering moving home either buying, selling or letting, please give us a call on 0330 043 0002 and speak with one of our Property Experts who will be happy to assist with all your property-related queries.
Leigh Thomas
Truuli Property Expert

How long are homeowners or renters staying in thier homes? Read More »

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Market Outlook: Climbing Rental Yields

The Rise Of Co-Living

Market outlook: More modest rates of rental growth ahead

Renters are putting down roots

What local amenities are important to you?

How long are homeowners or renters staying in thier homes?

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