Rental growth stretches tenant affordability

With tenant affordability under strain, how far can rents still go up?

The average rent rose 3.7% in the 12 months to July 2026, reports the Office for National Statistics. That's higher than the 3.3% it recorded in the 12 months to June, taking the average rent in the UK to £1,393.

And while rental growth is happening faster than at the start of the year, it’s low compared to the past couple of years. Growth peaked at 9.1% in March 2024, and measured above 5% for almost all of 2025.

Meanwhile, separate government stats warn that the average private renter spends 34% of household income on rent, well above the usual affordability guideline of 30%. If housing support is taken out, it’s a massive 39%.

Part of the issue is supply.  

This year, agents surveyed by RICS consistently reported that landlord instructions are down, while tenant demand has remained flat. While exact numbers vary, numerous polls have suggested that rental properties are being taken off the market. As supply falls, rents rise – pricing tenants on lower incomes out of the market.

Asking rents are also being pushed up by the Renters’ Rights Act, according to letting agents. To prevent bidding wars, the new law bans landlords from accepting rents above what was advertised. As a result, landlords are simply setting asking rents higher, expecting tenants to bid them down.