Priced-out tenants drive growth in towns

To find Britain’s hottest rental markets, look just outside cities.

New research from SpareRoom found that room rental demand was highest in towns close to cities in Q2 2025. In Sale (just outside Manchester), there were 8.9 people searching for each available room. In Oldbury (near Birmingham) there were 8.8, and in Bootle (near Liverpool) there were 8.7.

In fact, 18 out of the top 20 markets with the most demand compared to supply were towns. As might be expected, they’re experiencing rapid rental growth as a result: room rents increased by 47% in Sale between 2019 and 2025. The national average was 30%.

Why towns? According to Matt Hutchinson, director of SpareRoom, it’s because people are being priced out of cities. House shares are typically the most affordable option for tenants. If even those are out of reach, they move out.

“When renters reach their ceiling of affordability, there isn’t really a choice, they have to move somewhere cheaper,” he says. “The worry is that demand in these areas is now so high it’s inevitable prices will rise, until average rents are similar to those in the city they originally moved out of. And then where do renters go?”

How long before tenants are priced out of towns?

Towns are still a cheaper option than cities even after this rapid growth, although the gap is closing. In Sale, the area with the highest demand, the average room rent was £637 in Q2 2025, compared to £689 in Manchester (according to SpareRoom’s July stats). Tenants in Bootle save £76 a month compared to renting in Liverpool, while Oldbury tenants pay £82 a month less than they would in Birmingham.

SpareRoom’s data also shows the supply of rooms to rent is rising. Between January and April 2025, the number of rooms listed was 11% higher than the same period of 2024.

However, the same can’t be said for the market as a whole. According to August’s RICS UK Residential Market Survey, new landlord instructions are the weakest since April 2020. Shrinking supply could push more tenants into house shares, and out of cities.