Rents in UK are rising at highest rate in decades. Will they keep going up?

Rents in the UK are now at the highest point on record, surging beyond wider inflation and leaving renters on low incomes struggling to keep up or find an affordable place to live.

Average private rents in the UK increased by 8.1% in the 12 months up to January 2025, according to the Office for National Statistics (ONS). That is slightly down on the 8.7% recorded up to January 2025.

But, with UK inflation currently at 2.8% and wage growth at 5.8%, rents are outstripping both with renters feeling the pain of rising energy bills too.

Tenants across the UK are still paying just under £100 more every month on average than they were a year ago. In London, renters are having to find as much as £220 extra each month after rents rose by 9.9% annually, albeit down from 11% rises recorded in the year up to January.

That means rents have outpaced wage rises for 18 consecutive months, Generation Rent’s Ben Twomey said.

“Everyone needs a safe, secure and affordable home, but rents have outpaced people’s wages for years,” said Twomey. “They aren’t going up so quickly any more because, for too many of us, there is simply no money left. Nothing for the single parent trapped between their rocketing bills and the price of the roof over their head.

“Renters cannot afford to wait any longer. Building affordable housing is welcome, but it will take years for renters to see the benefit. The government can and must act now to slam the brakes on soaring rents. We have price caps on things like energy and water, but nothing to stop a landlord suddenly hiking the cost of someone’s home. It’s nonsensical and leads to poverty and homelessness, rippling through people’s lives.”

The devolved countries in the UK have engaged with the issue of rising rents more directly than Westminster in recent years. The Scottish government limited rent increases and banned evictions between September 2022 and April 2024 and are planning long-term rent controls. The Welsh government has also consulted on the idea of bringing in rent controls.

How much is rent in UK?

Around 4.7 million households use the private rented sector in England with 11 million renters. Around 450,000 households in Wales are private renters while 887,000 households renting in Scotland, including 323,000 renting privately.

The private rented sector is now the second biggest tenure of housing in England behind owner occupiers, making around a fifth of all households in the country.

The most recent ONS statistics show average rents increased 8.3% annually to £1,381 a month in England, rose 8.5% to £785 in Wales and 5.8% to £998 in Scotland in the year up to February 2025.

Renters in London are seeing the biggest increases in the UK with rents 9.9% higher than in February 2024 at an average price of £2,235.

Around 1.2 million private rented households have reported finding it difficult to pay rent, according to the English Housing Survey.

The Westminster government unfroze local housing allowance in April 2024 but tenants on low incomes are still facing a challenge to keep up. 

Labour declined to help renters keep up with rising rents when chancellor Rachel Reeves opted not to raise local housing allowance in line with the bottom 30% of market rents.

With housing benefit frozen and universal credit set to rise by 1.7% in April 2025, people on low incomes are being locked out of the private rented sector with many facing homelessness.

Rents have increased nearly £100 a month since LHA rates were last uprated, Renters’ Reform Coalition’s Tom Darling said.

“These unaffordable rent increases are driving families out of their homes and communities – we are very disappointed the government have frozen housing benefit,” said Darling.

“This government’s number one milestone is putting money back in the pockets of working people. But every year, landlords are taking money out faster than wages or benefits can put it in.

“Building more social housing is critical, yet this alone will not address this affordability crisis – we need to see serious action to make renting more affordable. That means a cap on rent increases now, to keep more tenants in their homes, and a national rental affordability commission to look at ways to bring down the cost of renting in the longer term.”

Households have faced rising bills and food costs in recent years as part of the cost of living crisis and there is no respite when it comes to housing costs.

But there has been little action on the issues driving rising rents, namely high demand for properties and a lack of supply.

Research from Zoopla found tenants are paying £3,240 more to rent each year than during the pandemic in 2021.

A 27% rise in the cost of new lets has seen tenants face an extra £270 a month in rents on average over the last three years while earnings have only grown by 19% over the same period, according to the property portal’s analysis.

Why is UK rent so high?

The short answer to why rent is so high is because there is a shortage of affordable housing.

There is a housing crisis in the UK because not enough homes have been built by successive governments in the last few decades at a time where social housing stock has been sold off to the private sector through Right to Buy or demolished and not replaced.

An estimate from the National Housing Federation found around 340,000 new homes should be supplied in England each year with 145,000 them to be affordable. Shelter has called for 90,000 social rent homes to be built each year for the next decade.

The previous Conservative government has previously targeted 300,000 new homes in England – a 2019 manifesto commitment – but failed to hit that mark. In 2023-24, 221,070 additional homes were recorded in England, including fewer than 200,000 newbuild homes, down 6% on the previous year’s total.

There have also been gloomy projections for the number of homes set to be built in the short-term future. Despite this, Labour has committed to building 1.5 million homes by 2029, including prioritising social rent homes to ease the demand on the private rented sector in the long-term.

Meanwhile, areas like Cornwall where tourism has seen a surge in short-term lets through the rise of Airbnb in recent years faces even more pressures on demand.

The private rental sector has picked up the slack in recent years and has doubled in size over the last two decades.

The stiff competition has seen rents on the market increase but many landlords have kept pace by putting up rents for existing tenants.

While generally speaking there is a shortage of private rental properties across the UK, the difference between supply and demand changes from region to region.

Will rent prices go down in 2025?

Rising rents are having an impact – the latest Ministry of Justice (MoJ) figures show the number of tenants evicted by private landlords continuing to surge. 

Just under 3,000 households were evicted from their homes through a no-fault eviction, also known as a section 21 eviction, from October to December 2024. That meant the number of people evicted through the courts after receiving a section 21 notice rose by 20% in 2024 when compared to the previous year.

The number of people facing a section 21 eviction, which allows landlords to evict a tenant without giving a reason, hit its highest point since 2016 at the end of 2024.

Rents on new properties are starting to hit the highest point of what tenants can afford, which is seeing rises start to slow. But it is a long way from rents starting to fall.

There is reason to think rents could yet rise further.

Zoopla is forecasting annual rent inflation of around 4% in 2025 – the lowest rate for three years.

Meanwhile, the National Residential Landlord Association has continually warned of a landlord exodus ahead of the introduction of the Renters’ Rights Bill driving up prices.

But the Resolution Foundation is forecasting a different reason for rents to rise and disputes the suggestion of landlords leaving the private rented sector.

The think tank said the surge in rent prices for new tenancies seen in recent times is set to filter into existing rents and could see payments rise by 13% over the next three years.

That is set to outstrip the 7.5% increase in wages forecasted by the Office for Budget Responsibility over the same period.

“With more families renting privately, and renting for longer too, these rent surges are a bigger problem for Britain, and require bolder solutions from policy makers,” said Resolution Foundation’s Cara Pacitti. “Short-term solutions include regular uprating of local housing allowance to support poorer families, and the ultimate longer-term solution is to simply build more homes.”

Labour’s Renters’ Rights Bill is expected to make it into law by the summer of 2025.

The Labour government has promised to abolish no-fault evictions, which allow landlords to evict tenants without giving a reason, through its Renters’ Rights Bill after the Conservatives’ Renters Reform Bill failed.

The bill has faced criticism for its lack of action on making renting more affordable and the government has rejected introducing rent controls.

Labour has promised the bill will end bidding wars between tenants as well as giving renters stronger rights to keep pets and avoid discrimination if they have children or are in receipt of benefits.

What will the Renters’ Rights Bill mean for private rental prices? Time will tell.

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