Demand for tenants in the private rental sector has fallen slightly over the past year but remains high by historical standards, data from Pegasus Insight shows.
The latest Landlord Trends survey from Q3 2025 shows that more than two-thirds (68%) of landlords continue to describe tenant demand in their area as ‘strong’, despite falling 11% year-on-year.
Overall, 30% of landlords say demand is “very strong,” and 38% say “quite strong.”
Only 5% of landlords report weak demand, which Pegasus says underlines the continued resilience of tenant demand in most parts of the market.
Landlords operating in the North East reported the strongest demand this quarter (71%), similar to the second quarter, while the East Midlands generated the weakest demand (60%).
Meanwhile, 44% of landlords reported experiencing a vacant property at some point in the previous twelve months, an increase of 7% from the second quarter.
Pegasus says the findings indicate the rental market may be moving to a more stable phase.
While demand remains strong, affordability constraints and broader economic pressures appear to be dampening the pace of activity, bringing conditions closer to longer-term norms.
Pegasus Insight founder and chief executive Mark Long said: “This slight softening in perceived tenant demand does not indicate any fundamental weakness in the rental market.”
“Demand remains strong by historical standards, but we are starting to see a shift from the exceptionally tight conditions of recent years.”
“Affordability is now playing a greater role in shaping behavior on both sides of the market. Tenants are more cautious about moving, while landlords seek to balance rising costs, regulations and the reality of what tenants can afford.”
“The result is a market that still has solid underlying demand, but is gradually becoming more measured and sustainable.”