The cost of renting in the UK has reached new heights, with the total bill for tenants hitting £112 billion in 2025. While the rental sector’s growth was slightly more modest last year at 2.75%, the five-year trend shows a 27% increase. This data forms part of a larger report showing that the UK’s total housing spend has reached £226 billion.
The research highlights a diverging experience between those with existing mortgages and those entering the rental market. Private landlords received £81 billion in payments last year, averaging £15,000 per tenant. This consistent rise in rent is putting significant pressure on the disposable income of the nation’s workforce.
Beyond the rental sector, the mortgage market is experiencing its own set of challenges. The surge in interest payments accounted for more than half of the £66 billion increase in total housing costs over the last five years. Homeowners who recently renewed their fixed-rate deals are seeing some of the largest jumps in monthly expenditure.
Economic forecasters are concerned that the expected “breathing room” for 2026 is no longer a certainty. Inflationary pressures linked to international geopolitical events are keeping lenders on edge. This has resulted in a recent uptick in mortgage rates, with many lenders withdrawing their most competitive offers.
Interestingly, the volume of homes available for sale has reached an 11-year peak for the spring season. This high inventory is helping to keep price growth in check, despite the steady demand from buyers. Asking prices rose just 0.8% in March, indicating a balanced market despite the broader economic uncertainty.