Derby Rental Growth 2020–2025: The Full Story

Author

Solomun Beyene
July 17, 2025

Good morning.

Every market shift creates winners and spectators. Which one will you be?

We been looking at Derby the past few weeks. This week, we uncover the story behind Derby’s fiver-year rental rise.

Temperatures might be soaring in the UK with the beautiful sun shine, but is the rental price demand cooling in Derby? And what does this mean for investors?

You’ll discover how past trends, future projects, and shifting fundamentals point to a market not in decline, but in transformation.

This is the kind of clarity that moves you ahead of the curve.

Let’s dive in.

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DERBY RENTAL GROWTH 2020-2025: THE FULL STORY

Data Capital readers, let’s zoom out.

Forget the short-term headlines about “cooling.”

Derby’s rental market has quietly transformed over the last five years—and for those paying attention, it’s opened up one of the most exciting windows of opportunity we’ve seen in a while.

What the Data Really Shows

Between 2020 and 2025, Derby rents jumped by 24.6%, rising from £671 to £836 per month.

That’s a 4.5% annual growth rate—consistently outperforming many other UK cities.

But the real story lies in the shape of that growth—and what it means for you.

Phase 1: The Takeoff (2020–2022)

This was the moment early investors struck gold.

Rents soared 19.8% in just two years

2022 alone saw a record-breaking 13.6% jump

Why it matters: If you were in early, you’ve likely enjoyed one of the most lucrative rental returns in recent memory.

Phase 2: Steady Climb (2022–2024)

As the market matured, it shifted into more stable territory.

Rents rose another 9.7%

Investors enjoyed steady income growth without the chaos of volatility

Why it matters: This phase offered peace of mind—an income stream you could rely on.

Phase 3: The Cool-Off (2024–2025)

For the first time in five years, average rents dipped slightly (-5.2%).

Why it matters: This is not a crash—this is the pause before the next move. And for strategic investors, this is when you enter.

Why 2022 Was a Tipping Point

The surge wasn’t luck. It was driven by real fundamentals:

  • Post-COVID migration: Remote work made Derby a magnet for London leavers

  • Landlord exits: Regulation + rising costs squeezed supply

  • Strong local economy: Global players like Rolls-Royce and Toyota kept jobs stable and incomes strong

Even better?

Rents lagged behind inflation (24.6% rent growth vs 35.2% inflation), which means this wasn’t just hype—it was real demand meeting limited supply.

What Happens Next?

We’re not in decline—we’re in transition. And this is where smart investors lean in.

  • Young, growing tenant base: Over 1 in 5 Derby residents are aged 19–35. Young professionals and an ongoing job creation in high-value sectors provide sustainable tenant pools.

  • Reduced void risk: Recent cooling makes rents more accessible, attracting a wider tenant pool

  • Major regeneration projects will add jobs and amenities, supporting rental demand while new supply won't fully materialise until 2026-2028

BOTTOM LINE

This market has already rewarded those who got in early. But here’s the truth: the next wave of returns will go to investors who act during the reset.

You're not too late. You’re actually right on time.

Because success in property isn’t about following the crowd.

It’s about understanding the cycle—and getting in before the next upswing.

We’re here to help you read between the lines.

TO DO LIST

Shortlist Derby Properties with 6%+ Yield

Now that the market has corrected slightly, it's a good time to identify properties where rental yield is strong relative to price.

  • Use Rightmove or Zoopla to filter for 2-3 bed properties under £160k in DE1, DE22, or DE23.

  • Cross-check with current rental values to find listings with at least 6% projected yield. Check our last newsletter in how to calculate your yield.

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