As we are all aware the rental market in the UK has seen rental prices continue to hike up year on year. For the remainder of 2025 and into 2026 rents are set to continue increasing but at a more moderate rate than we have seen in previous years. The average private rent in Dorset is now approximately £1,002 per month (as of June 2025), a 3.4% annual increase from 2024.
Smaller properties are seeing the fastest growth. Tenants looking for one to two bedroom properties are experiencing the sharpest rent increases, with annual growth rates of up to 3.7% in some areas.
Whilst larger family homes are still in demand, rental growth in that segment is slowing slightly, with a 2.9% increase mainly due to affordability ceilings being reached.
Increase in reductions?
According to a recent Rightmove report an average of 24% of rental listings have had their prices reduced so far in 2025 which is the highest proportion of rental properties reduced in this decade.
Balance of supply and demand
The slowing of rental price increases is mainly due to the improved balance between supply and demand. The total number of available rental listings dropped in the last quarter of 2024 and we have seen this steadily grow throughout 2025. Whilst the supply and demand gap is narrowing there are still areas where demand remains high and Dorset is one of them! One way we have been able to combat this is with the tightening of holiday let regulations. We have seen more short term clients transition into our long term residential stock, particularly in Portland and Swanage.
What to Expect in Late 2025 and Early 2026
- Rent rises expected to continue, but at a slower pace than in previous years
- More supply may return to the market if holiday let regulation tightens
- Increased focus on energy efficiency could reshape tenant and landlord priorities
- Demand likely to remain strong as affordability challenges push more people into renting longer term
The Dorset lettings market remains competitive and landlord-friendly — but only for those who adapt to rising tenant expectations and shifting regulations. With professional management, attractive presentation, and an understanding of local demand trends, landlords can continue to achieve strong returns in one of the UK’s most desirable coastal counties.
Our lettings team are here to navigate you through all of the challenges in the rental market, get in touch with us today!
