Where landlords should invest: the UK’s hottest rental markets revealed

The Renters’ Rights Act is set to kick in on May 1, 2026, providing 11 million renters in the UK with stronger rights, including better protection and security for their rental properties. While this shifts the management of rental properties for landlords, it also presents opportunities in areas with the highest demand.

As such, Pepper Money has created the UK Rental Index, analysing 42 locations to reveal where the demand for rental homes is rising fastest.

The Top 10 cities where landlords are experiencing strong rental demand

As the new legislation approaches, Pepper Money can exclusively reveal the 10 locations where renters are facing fierce competition.

To do this, Pepper Money analysed search interest in rental properties, stock levels, rent inflation, letting speed, and average rent by property type.

Overall, Chichester residents face the most significant demand for rental properties due to high demand in search interest and average rent prices per month.

In the last year, Chichester became one of six areas in England where social housing was deemed ‘unaffordable’, with renters set to spend 33% of their income on rent. This, combined with the search interest analysed, could suggest that affordable rents are increasingly in high demand in the city. This provides an opportunity for landlords, especially those with competitively priced homes in an increasingly fast-growing market.

Bath and North East Somerset ranked second, overall, in Pepper Money’s UK Rental Index. This is due to Bath scoring high for search interest, with 340 searches per 10,000 people, suggesting rental homes are in sharp demand. This area has also seen high inflation in rent prices, with an average of a 9.7% increase annually in prices for 1-bedroom and 2-bedroom homes. With this information, we can see that there is interest in growth for landlords, particularly for those renting smaller properties.

Overall, Exeter is third in the UK Rental Index. This city has recently hit the news, with 60% of rental properties in Exeter assigned as student accommodation, suggesting demand for traditional rental properties could continue to grow. This could be behind the high number of searches for ‘places to rent’ in Exeter, ranking second out of 42 for the highest search interest in rental properties in the index. Again, this offers an opportunity for landlords, especially for growth in the non-student market.

Low-supply hotspots: Where rental homes are limited

The UK Rental Index analysed search interest for rental properties to reflect growing demand.

Search interest for rented homes is at its highest in Chichester, with 659 searches per 10,000 people. This is almost double that of Exeter, with 369 searches per 10,000 people, the second city to see the highest searches for rental properties.

In third place for search interest is Bath and North East Somerset, followed by Winchester and Canterbury. This shows there’s increasing demand for rented homes, particularly in the southern regions.

There are fewer properties per person in the South of England than in any other region

Further to the above, the UK Rental Index highlights the issues tenants in the south are facing. In Southend-on-Sea, this increases to only six homes per renter. Welsh residents are also feeling the squeeze, with renters in Swansea and Newport also facing the same challenges, with five properties per 10,000 people.

Again, this could represent a shift in the market. Are more people moving towards renting than buying a property? This could signal a growing demand for long-term landlords, providing an opportunity for landlords with larger homes for rent and the ability to communicate with their renters to provide long-term rents and more reliability and security with their homes.

And Plymouth’s rental properties are snapped up in just 117 days

However, Plymouth experiences the fastest turnover of its properties. Pepper Money analysed the median days 1-bedroom, 2-bedroom, 3-bedroom, semi-detached homes and flats were on the market, and can reveal that these homes were taken in just 117 days. This further highlights the sheer demand for homes in the south.

Interestingly, the property types in highest demand reflect this growing change.

From 1-Bed flats to semi-detached homes: The properties landlords should consider

Semi-detached homes are the most in demand, with just 122 days on the market across the 42 locations analysed. This is compared to 221 days on the market for a 1-bedroom property, suggesting that Brits are settling down in larger, rented homes as opposed to buying a property.

Research has shown that people buying a home are spending 10 times more than homeowners did 30 years ago. In some cities, it’s cheaper to rent than buy a property, and the UK Rental Index reflects that same trend.

However, when we examine specific locations, renters in Newcastle upon Tyne are encountering the most intense competition for these types of properties, with the average semi-detached home available for only 90 days. Newcastle boasts the fastest-paced property market in the UK, according to previous research, which could be behind the sheer demand for semi-detached homes in the city.

High-rent areas: Where yields are strongest

The UK Rental Index also analysed the average rent price for 1-bedroom, 2-bedroom, 3-bedroom, semi-detached properties and flats and can reveal that renters in the south are paying the most.

On average, renters in London are paying £2,247. This could be set to rise further with a chronic ‘housing shortage’ on the cards for this year. Second to the capital is Oxford, with renters paying, on average, £1,720. Similar to residents in London, Oxford renters are facing higher rents and even more demand for properties, which could be driving the price up.

Interestingly, Chichester – the city with the most in-demand rental properties, according to the UK Rental Index – has the 10th highest rents of all 42 locations analysed. Chichester renters can expect to pay an average of £1,227 on rent per month.

The trends point to tenants staying longer and looking for larger homes, which shows real growth potential for landlords.

Expert Insight: Navigating the UK’s high-demand rental market

Paul Adams, Sales Director at Pepper Money says:

We can see that rent is continuing to grow in demand in the UK. Our research highlights strong levels of search interest across 42 locations, alongside very short letting periods. Properties such as semi-detached homes and 3-bedroom homes are on the market for just 122 days and 132 days, respectively. This suggests that renters are moving fast to secure their homes in an extremely competitive market, and it’s something that landlords can see and work with renters to secure desired tenants.

Interestingly, the data shows a trend in where renters are looking, with semi-detached properties the most sought after. This reflects a growing number of long-term renters, whether due to lifestyle changes or cost-of-living challenges. We can see that more people are choosing to rent rather than buy their own property.

As this shift in renting continues, there is an opportunity for renters and landlords to work more closely together. Our recent research also highlighted the correlation between the happiness of a tenant, and the proximity of a landlord to the property. There is a greater demand for stability, reliability and more trust on each side. Landlords who understand the evolving needs of their renters – such as longer tenancies and, in some cases, more space – are at a greater chance of succeeding and securing those longed-for tenants in this competitive market.”

For landlords, understanding where demand is strongest and what tenants are looking for is key. If you would like to speak to our experts regarding advice, check out our buy-to-let mortgages offering, providing up-to-date information for landlords in 2026.