Slowing Growth but Persistent Demand

The rental market across the South East and North Oxfordshire, including property rentals in Oxfordshire, continues to show resilience, even as the wider UK market begins to cool. Demand remains strong, driven by limited housing supply, steady employment, and continued migration from London and other high-cost areas. Yet affordability pressures and legislative uncertainty mean both landlords and tenants are entering a new phase of cautious adjustment.

Demand Still Outstripping Supply

Despite a gradual easing in rental inflation nationally, demand for quality rental homes in the South East and North Oxfordshire remains high. According to recent data from the ONS, private rents across the South East have increased by around 5.6% year-on-year, while the UK average sits just below 6%.

In towns such as Banbury, Bicester, Kidlington, and Witney, demand continues to exceed supply — particularly for well-maintained two- and three-bedroom family homes and modern apartments with parking. Many tenants are choosing to remain in their current properties to avoid moving costs, which keeps stock turnover low and intensifies competition for new listings.

Meanwhile, commuter towns along the M40 corridor—including Thame and Princes Risborough—remain particularly buoyant. Tenants priced out of Oxford or London continue to migrate outward in search of better value, good schools, and improved work-life balance. This trend, which began during the pandemic, has shown no sign of reversing in 2025.

“We’re seeing strong demand across our portfolio,” says Ben Jones, Director of Stepping Stones Letting. “Properties that are well-presented and sensibly priced are still letting very quickly, often with multiple applications. There’s a clear shortage of good-quality homes, and that continues to underpin the market locally.”

Affordability Is Reaching Its Limit

Although rents are still edging upward, affordability is becoming a serious issue for many households. Average monthly rents across the South East now stand at £1,450–£1,600, depending on property size and proximity to transport links. In Oxford itself, average rents exceed £1,800 per month, placing the city among the UK’s most expensive rental locations outside London.

This squeeze is forcing tenants to make compromises — smaller homes, longer commutes, or shared accommodation. Many are prioritising properties with strong energy efficiency ratings (EPC C or above) to help offset higher living costs. For landlords, this reinforces the value of investing in insulation, efficient heating, and modern fixtures that appeal to cost-conscious tenants.

“Energy efficiency and comfort have become major decision factors,” adds Ben Jones. “We always encourage our landlords to stay ahead of the curve — improving EPC ratings now can protect income and attract long-term tenants.”

The Sales Slowdown Is Affecting the Rental Market

The local sales market has softened noticeably, with buyer confidence dampened by high mortgage rates. As a result, some would-be sellers are choosing to let their properties instead, temporarily boosting rental supply. However, this effect is uneven. In Oxfordshire’s rural and semi-rural areas, there’s still a chronic shortage of rental housing, particularly for families and professionals relocating for work.

Corporate relocations and the strength of local employers — from science and tech firms around Oxford’s Innovation Arc to logistics and manufacturing companies near Banbury and Bicester — continue to underpin stable demand for mid- to high-end rentals.

Legislation Looms Large: The Renters’ Rights Bill

The forthcoming Renters’ Rights Bill, expected to replace the long-debated Renters’ Reform Bill, is creating uncertainty among landlords. With the proposed end of Section 21 ‘no-fault’ evictions, new rules on rent reviews, and greater requirements for property standards, many smaller landlords are feeling apprehensive.

While the broad intent of the legislation is to strengthen tenant protections, the lack of clarity on implementation timelines has led some investors to pause expansion plans. Others are opting to streamline their portfolios and focus on long-term, reliable tenants to reduce risk.

“Most landlords just want clear, fair rules,” says Ben Jones. “If the government can balance tenant protections with realistic expectations for landlords, it will go a long way toward stabilising the sector.”

Pockets of Opportunity

For investors and landlords with a long-term outlook, the South East — particularly North Oxfordshire — still offers solid fundamentals.

Banbury remains one of the region’s most affordable towns relative to Oxford, attracting a steady flow of renters seeking good transport links and larger homes.
Bicester continues to benefit from strong commuter demand and large-scale infrastructure investment, including regeneration projects and business growth around Bicester Village.
Witney and Chipping Norton attract families and professionals who prefer market-town living with easy access to Oxford and Cheltenham.
The Science Vale area (Didcot, Abingdon, Harwell) is emerging as a hotspot for high-earning professionals working in research and technology sectors — pushing up demand for high-spec homes.

Investors focusing on energy-efficient, low-maintenance homes in these areas can expect stable yields and minimal void periods. Build-to-Rent developments, meanwhile, are slowly gaining traction, though large-scale schemes remain concentrated in major towns.

Looking Ahead: A More Stable Market

Most analysts expect the South East rental market to stabilise over the next 12 months, with annual rent growth moderating to around 3–4%. While the days of rapid increases seen in 2022–23 are behind us, the region’s strong economy and limited housing pipeline will continue to support prices.

The biggest variable remains government policy. If new regulations strike the right balance between protection and profitability, confidence could return to smaller landlords and bring more stock back to market. However, if uncertainty persists, supply shortages are likely to deepen, keeping rents elevated despite slower growth.

Final Thoughts

As Ben Jones of Stepping Stones Letting concludes:

“We’re entering a more balanced phase of the rental cycle. There are challenges, but also real opportunities for landlords who adapt. By maintaining properties to a high standard, staying compliant, and working closely with tenants, landlords can still achieve great results — even in a changing market.”

For landlords across North Oxfordshire and the South East, the key message is clear: the market remains strong, but success depends on preparation, professionalism, and partnership.

At Stepping Stones Letting, we continue to help landlords navigate this evolving landscape — providing expert advice, proactive management, and peace of mind in an ever-changing rental environment.