The Cotswolds rental market has shifted over the past 18 months, and the latest 2025 data from Rightmove helps to explain why. Following a period of exceptional growth in 2024, rental increases have slowed significantly, with average advertised rents rising by around 2% across 2025, and similar modest growth expected into 2026.
This signals a clear transition. Demand remains strong, particularly for high-quality homes in prime locations, but tenants are more selective and pricing has become increasingly important.
For property owners, this is less about rapid rental growth and more about consistent, well-managed performance.
A Shift in Supply and Demand
During 2024, the imbalance between supply and demand strongly favoured landlords. That position has begun to rebalance. Recent market data indicates that available rental stock in the Cotswolds has increased by approximately 16.8% year-on-year, while agreed lets have fallen by around 4%. This reflects a market where tenants have more choice and are taking longer to commit. This does not signal a weak market, it is simply a more balanced one.
Rental Growth Has Stabilised
The pace of rental growth has slowed significantly. Across the UK, average advertised rents increased by around 2% in 2025, with similar modest growth expected into 2026. This follows a period of sharp increases, with some areas of the Cotswolds experiencing rental growth of over 20% during 2024.
At the premium end of the market, typically between £2,000 and £10,000 per month, tenants remain willing to pay for quality, but expectations around value are higher.
A Two-Speed Market is Emerging
One of the defining characteristics of the current market is a clear divide in performance. Properties that are well presented, correctly priced and located in desirable villages or edge-of-town settings continue to attract strong interest. By contrast, properties that are dated or overpriced are taking longer to let. This is consistent with wider market data showing an increase in price reductions across rental listings, as landlords adjust expectations to match tenant demand.
Pricing Strategy and Tenant Expectations
In a more competitive market, initial pricing is critical. A property that remains vacant for even a short period can significantly impact annual returns. As a guide, a single vacant month represents approximately 8% of annual rental income. This makes early pricing accuracy and a strong launch strategy essential. At higher price points, tenant expectations have evolved. Tenants are not simply renting a property, they are choosing a lifestyle, and they are increasingly discerning in how they assess value. Tenants are not simply renting a property, they are choosing a lifestyle.
Cotswold Property Trends: Character, Space and Quality
The charm of quintessential Cotswold cottages remains a significant draw. Edge-of-village cottages continue to feature highly on tenants’ wish lists, particularly those looking to embrace the lifestyle the area offers. Homes with cosy rooms, wood burning stoves and exposed beams are as popular as ever, especially among tenants seeking the experience of living in a traditional Cotswolds property. These features are not simply aesthetic, they are central to the appeal of the region.
At the same time, there is a clear and growing demand for modern living spaces. Open-plan layouts, particularly large kitchen diners, remain highly desirable. This is especially evident in barn conversions and rural properties, where tenants are drawn to a combination of traditional architecture and contemporary functionality.
The most successful properties are those that strike this balance well. Character remains essential, but it must be complemented by quality and practicality. Luxury also plays an increasingly important role in tenant decision-making. At higher price points, the following features are expected:
- thoughtfully designed interiors finished to a high standard
- high-spec, well-equipped kitchens with premium appliances
- large walk-in showers and roll-top baths across a mix of bathrooms and ensuites
- underfloor heating
Sustainability and Responsible Living
As a certified B Corp, sustainability and community are central to our approach at The Cotswold Letting Agency, and this is increasingly reflected in tenant demand. Sustainable living is firmly established as a long-term trend within the Cotswolds rental market. Tenants are actively seeking properties that support both environmental responsibility and cost efficiency. Whilst many Cotswold properties are historical homes we are seeing demand increase for features such as:
- energy-efficient appliances and lighting
- solar panels
- smart heating systems
There is also a noticeable rise in demand for electric vehicle charging at home. For property owners, this is a relatively simple addition that can enhance both appeal and long-term value. For many tenants, sustainability and cost efficiency is no longer a secondary consideration. It is part of the overall decision-making process.
The Continued Strength of Short Lets
One of the most consistent trends in the Cotswolds rental market is the ongoing demand for furnished short-let properties. Flexible rental terms continue to meet the evolving needs of tenants, and this is an area where specialist local knowledge is particularly important.
We are seeing strong demand from local homeowners undertaking significant renovation projects, who are seeking high-quality short-term accommodation while works are completed. At the same time, a growing number of tenants are new to the Cotswolds and are using short lets as a way to experience different areas before committing to a longer-term move. This flexibility is a defining feature of the Cotswolds market and sets it apart from more traditional rental locations.
For property owners, short lets can offer greater flexibility of use themselves, the ability to achieve strong returns during peak demand periods and can offer access to a broader tenant base. When managed correctly, they form an important part of a well-considered letting strategy.
The Cotswolds remains one of the UK’s most desirable rental markets. However, the conditions that defined 2024 have changed. Growth has stabilised, supply has increased, and tenants are more discerning.
For property owners, success in 2026 is increasingly driven by pricing accuracy, presentation quality, and a clear understanding of tenant expectations. In a more balanced market, experience and local insight are more valuable than ever.
