The North East Rental Market in 2025: What Landlords Need to Know

The rental market in the North East of England continues to shift. While the pace of rental growth is beginning to stabilise, tenant demand remains high—particularly in affordable areas like Gateshead, Sunderland, Hartlepool, and County Durham, where supply still can’t keep up.

If you’re a landlord in the region, staying on top of current trends is essential—whether you're managing existing tenancies, planning to expand your portfolio, or thinking about making strategic changes in the year ahead.

Rental Growth Slowing, But Demand Stays Strong

Across the UK, the average rent is now £1,284 (up 3% year-on-year)—but in the North East, rental inflation is outpacing the national average at 6.3%. This shows that affordable regions are still seeing solid growth, driven by renters seeking value for money outside the major cities.

That said, the market is showing signs of balance. Affordability pressures are causing more tenants to stay in their homes longer, meaning new lets are slightly cooling—but not disappearing. This is especially relevant in towns like Hebburn, Washington, and South Shields, where there’s strong local demand but more pricing sensitivity.

Still High Competition for Each Property

On average, there are still 12 tenants competing for every available rental—a sign that supply is still well below what’s needed. While there has been a slight increase in available stock, it’s not enough to meet ongoing demand.

For landlords, this means well-priced, good-condition properties will continue to let quickly, but overpriced or outdated HMOs and flats may struggle, especially in less central locations.

Rising Costs and Policy Pressure

We understand that utilities, maintenance, and compliance costs are rising, particularly in HMOs or older buildings common in the North East. However, holding out for higher rents in a softening market may lead to longer voids—impacting overall yield.

At the same time, national policies are reshaping the rental sector:

The Renters’ Reform Bill is expected to pass soon, with changes to tenancy structures and notice periods.

EPC rules are tightening—many landlords will need to invest in upgrades before 2028 to remain compliant.

Tax changes and higher interest rates are putting pressure on profit margins.

As a result, some landlords are exiting the market - but others are using this as an opportunity to reposition their portfolio and attract long-term tenants.

North East Outlook for 2025

Zoopla forecasts rental growth of 3–4% nationally in 2025, but more affordable areas—like much of the North East—are likely to see stronger growth, especially where investment in housing remains low.

Here’s what that means for landlords:

• Tenants are staying longer, so keeping them happy with fair rent and responsive maintenance is key.
• Energy upgrades will soon be necessary—acting now can help spread the cost.
• Staying ahead of legislation will protect your returns and minimise future risk.

What Should You Do Now?

If you own rental property in the Northeast, this is a great time to:

• Review your current rents to stay competitive and avoid voids.
• Check your EPC rating and explore cost-effective improvements.
• Evaluate your portfolio to decide whether to retain, reinvest, or restructure.
• Get expert advice to stay ahead of the curve.

At NGU Homes, we specialise in helping landlords across the North East make the right decisions—backed by data, market insights, and over a decade of local experience.

📞 Book a free rental review or portfolio consultation with our lettings team today—we’re here to help.