A 15% surge in Brighton rents during 2025 is likely to sharpen broker focus on yield-led buy-to-let opportunities as the rental market closes the year in growth mode.

Figures from Lomond show the South Coast city recorded the strongest rental growth in the UK, significantly outperforming the national average increase of 4.9%, which took typical rents to £1,602pcm.

The wider South Coast delivered 10.5% annual growth to £1,774pcm, with demand in Brighton, Southampton, Portsmouth and Worthing continuing to exceed supply – particularly for two- and three-bedroom homes.

REGIONAL DIVERGENCE

Stronger rental inflation directly supports gross yields and improves interest cover ratios (ICRs), a key affordability metric for buy-to-let underwriting.

In higher-growth pockets such as Brighton, rising rents may offset the impact of elevated mortgage rates and tighter stress testing.

London, by contrast, saw rents rise by just 1.5% to £2,395pcm. While still nearly 50% above the UK average, slower rental growth in the capital may limit yield expansion compared with regional markets.

Across the Midlands and North West, rents increased by 5% and 4% respectively, offering steadier – and potentially more sustainable – income growth profiles for leveraged investors.

Lomond also reported that buy-to-let mortgage activity, which dropped sharply between 2023 and 2024, stabilised throughout 2025. Buy-to-let lending accounted for around 8-9% of all new mortgages, suggesting landlords remain active but increasingly selective.

STRATEGIC INVESTMENTS

Ed Phillips, Lomond CEO, said: “The UK’s rental sector showed real resilience in the final quarter of 2025. With the market framework now in place, the challenge shifts from anticipation to execution in both lettings and sales.

“While regional trends vary, demand remains strong, and landlords continue to invest strategically. With buy-to-let lending stabilising and rents rising at a manageable pace, the market enters 2026 on solid footing.”