The North West has always been a magnet for students, young professionals, and families, thanks to its vibrant cities like Manchester, Salford, and Liverpool, and historically affordable property prices. But as we head into 2025, the region is experiencing an unprecedented rental crisis. With inflation soaring, landlord numbers declining, and government reforms reshaping the property sector, the impact on renters and landlords alike is impossible to ignore.
So what’s behind the rent surge—and what can tenants and landlords do to adapt? Let’s explore.
In Manchester, average rents have risen by 41% in just four years, now sitting at £1,122 per month. Similar trends are playing out in Salford, Liverpool, and Bolton, where double-digit increases have become the norm. What’s driving this?
Surging Demand, Shrinking Supply: A Perfect Storm for Rising Rents
- Fewer rental properties: Up to 50% of landlords have sold or plan to sell part of their portfolios, mainly due to upcoming legislation and tax reforms.
- Tenant demand is exploding: The private rental sector has seen a 132% increase in renters over the last three decades, with the ratio of tenants to rental properties now exceeding 2.2:1.
According to Mish Liyanage, CEO of The Mistoria Group:
“Homes are being rented almost as soon as they’re listed. Government measures, instead of encouraging investment, are pushing landlords away from the sector, worsening the supply crunch.”
The Cost-of-Living Crisis: More Renters, Less Buying Power
With energy bills, food prices, and transport costs skyrocketing, saving for a deposit has become unrealistic for many. Despite slight mortgage rate improvements, homeownership remains out of reach for a large section of the population.
That means more households—students, young couples, and even older tenants—are staying in the rental sector for longer. In hotspots like Greater Manchester and Salford, the competition is intense, with multiple tenants bidding for each available property.
Rent Poverty and Reduced Options for Tenants
The squeeze on supply has pushed renters to breaking point. A 2024 survey revealed that nearly half of tenants in the North West now feel they are in “rent poverty”, spending an unsustainable portion of their income on housing.
Student renters are particularly affected. In cities like Salford and Liverpool, high demand for student HMOs is clashing with stricter compliance demands, including the Salford Selective Licensing Scheme, which requires additional licensing for HMOs in Langworthy, Weaste, and Seedley.
Landlords Under Pressure: Regulation and Tax Burdens Rising
The Renters’ Rights Bill, due to become law in 2025, is further reshaping landlord responsibilities. Key reforms include:
- Abolition of Section 21 “no-fault” evictions
- Mandatory periodic tenancies
- Rent increase caps (once per year only)
- Stricter property standards under the Decent Homes Standard
- Mandatory registration on a national landlord database
In addition, higher Capital Gains Tax, abolished mortgage interest relief, and rising corporation tax rates are eroding profit margins. Many landlords have responded by transferring properties into limited company ownership structures to reduce their tax liabilities.
The 2025 Rental Market Outlook: What Lies Ahead?
Rents across the UK—and especially in the North West—are forecast to rise by 3.5% annually until 2028. While this may sound like good news for landlords, the broader picture is more nuanced.
- For tenants: The upcoming reforms could offer improved protections, more transparent pricing, and better housing standards—but without a significant increase in supply, affordability will remain a concern.
- For landlords: The key will be compliance and agility. Those who adapt quickly to the new regulations and invest in high-demand property types (e.g., compliant HMOs, student accommodation) stand to benefit from rising rents and tenant demand.
Final Thoughts
The North West’s rental market is evolving rapidly, shaped by economic pressures, regulatory change, and shifting tenant expectations. With demand far outstripping supply, competition for rental properties is fierce, and prices are rising accordingly.
Whether you’re a landlord navigating new legal frameworks, a student seeking affordable housing, or a property investor looking for sustainable returns, understanding this landscape is vital.
At Mistoria Group, we combine deep local knowledge with decades of experience across the North West property market. Our expert team can help you stay compliant, optimise your rental yields, and secure quality tenancies even in a competitive environment.
Ready to take the next step?
Contact Mistoria Estate Agents today for expert property advice, portfolio assessments, or to learn how we can help you navigate the rental market in 2025 and beyond.
Visit our website or call 0800 500 3015
