Over the past five years, Lancaster’s rental market has seen steady growth. In 2020, the average monthly rent was £825. In 2025, it’s now £891—a rise of 8%.
This growth, however, is smaller than what we’ve seen nationally. Across the UK, rents rose by 35%, from £1,331 to £1,803. In the North West, the average jumped by 45%, from £803 to £1,165.
Some landlords across the UK have had to reduce their prices due to affordability issues, with 24% of rental listings seeing price reductions in 2025. Despite this, tenants in Lancaster are still paying noticeably more than they were five years ago.
Rental Supply in Lancaster
While rents have gone up, the number of available rental properties in Lancaster has dropped:
- 2020: 139 new listings/month
- 2021: 117
- 2022: 126
- 2023: 105
- 2024: 109
- 2025: just 73
We also see seasonal trends. Rental listings peak in late spring and early autumn, especially October (thanks to the student market), while winter—especially December—has the lowest levels.
Since the pandemic, supply has remained tight. Nationally, rental availability is still over 25% lower than pre-2020 levels. Here in Lancaster, tenant demand remains strong, although the intense competition seen in 2022 and 2023 has eased slightly.
Even so, listings still attract several enquiries. Lancaster continues to be an appealing place to rent due to its affordability and good transport links. Low vacancy rates show that homes are letting quickly.
Experts believe the UK needs around 50,000 more rental homes each year to restore the supply seen before 2020. Until that gap closes, rents are likely to keep rising. For 2025, we’re expecting Lancaster rents to increase by another 3% to 4%.
The Landlord Outlook – 2025
For landlords in Lancaster, the picture is a mix of challenges and new opportunities.
Challenges Facing Landlords
🛑 Regulation and Reform
The upcoming Renters’ Rights Bill could bring major changes. The planned removal of Section 21 ‘no-fault’ evictions and new rules around tenant protections have left some landlords worried—especially when dealing with difficult tenancies.
On top of that, stricter energy efficiency standards are on the horizon. Many landlords are concerned about the cost of improving older homes to meet them.
💸 Rising Costs
Interest rates on buy-to-let mortgages have risen from 2–3% post-pandemic to over 5% by 2024. The Bank of England recently lowered its base rate to 4.25%, which offers some relief, but inflation has pushed up the cost of repairs and materials. Many landlords now spend around 20% of their rental income on maintenance alone.
💼 Tax Changes
Changes to mortgage interest relief and Capital Gains Tax have squeezed profits, particularly for higher-rate taxpayers. Since 2017, they’ve had to pay tax on rental income before deducting interest. There’s also the added admin of Making Tax Digital. These pressures have caused some landlords to sell up—15.6% of homes listed in Q1 2025 were former rentals, up from 9.8% the year before.
📉 Tenant Expectations & Affordability
With living costs still high, tenants expect more from their homes—better insulation, reliable broadband, and modern finishes. Rent arrears remain a concern. Data from Denton House shows that 5–6% of tenants with self-managing landlords are behind on rent. This drops to under 2% for those renting through letting agents. Balancing rent increases with tenant sustainability is key.
Opportunities for Lancaster Landlords
✅ Tenant Demand Remains High
Despite everything, demand in Lancaster stays strong. The city is still one of the more affordable places to live, especially for families and couples. Well-maintained homes continue to let quickly, often with minimal void periods.
📈 Improved Yields
Rising rents have pushed up yields. For landlords without mortgages—or those with smaller loans—this means better returns. Even with borrowing, many are still seeing healthy profits if they’ve priced their rentals wisely.
📉 Less Competition
As some landlords leave the market, those who remain benefit from less competition. New opportunities are opening up. We’ve seen landlords growing their portfolios and new investors entering the market. If you’re thinking of expanding, we can check our database for portfolios that might suit—often with tenants already in place.
Final Thoughts
Yes, the landscape is changing—but for landlords willing to adapt, invest in their properties, and keep tenants happy, Lancaster still offers strong long-term potential.
Whether you’re a self-managing landlord or use another agent, I’d be happy to chat through your plans and offer advice.
Do you have any thoughts? If so we would love to hear from you. At JDG we are always here to help.
Thanks for reading
Josh
