With a 21% increase over three years, rents are rising faster than mortgages

Since 2022, renters' monthly housing expenses have increased more than those of mortgaged homeowners, according to Zoopla

In just three years, the average monthly rental price in the UK has increased by 221, surpassing the rise in mortgage payments during that same time frame.

The average monthly repayment on outstanding mortgages, which is driven up by higher mortgage rates, has only increased by 218 according to the real estate website Zoopla.

Also, renters often pay more than homeowners. In the UK, average rent is currently 1,283 per month, and the average mortgage repayment is 1,154.

The demand for rental properties grew quickly in 2022 and 2023, but the supply of privately rented homes stayed largely unchanged because buy-to-let landlords did not make significant new investments. This is the reason for the 21% increase in rents since 2022.

Although there has been a lot of attention focused on rising interest rates and their effects on homeowners who have mortgages, Richard Donnell, executive director at Zoopla, notes that renters have also seen significant cost increases.

Concerns about how mortgagees would be able to afford larger repayments over the previous three years were raised by a shift to higher mortgage rates. Because mortgage regulations made sure borrowers could afford higher mortgage rates, the sales market has been robust," he says.

The cost of renting has increased dramatically in recent years due to a combination of high demand and a shortage of available rental properties, which has disproportionately affected lower-income renters.

Rent increases have, however, significantly slowed. According to a report released last month by Zoopla, as affordability pressures begin to bite and tenant demand cools, rents are increasing at the slowest rate in four years. In the 12 months leading up to April, average UK rents rose by 20.8 percent, which is less than half of the 60.4 percent increase seen the previous year.

In which regions of the United Kingdom have rents increased the most?

Over the last three years, rents in some localities have increased especially quickly because demand for rentals has outpaced supply.

Rents have increased from a relatively low base by more than 31% in just three years in places like Oldham, Wigan, and Bolton.

The highest rents are found in London, where some areas of the city have seen the biggest price increases, rising by £400 per month over the previous three years. More reasonably priced outer London neighborhoods, like Ilford in east London, have seen the largest increases in rental prices.

Source: 2025 Zoopla Rental Index.

What's caused the spike in rents?

Due to an increase in demand for rentals following the pandemic, rental prices have increased since 2022.

Strong labor markets and increased migration for employment and education have increased demand for rental properties, according to Zoopla. Since it became more difficult to purchase a home due to rising mortgage rates in 2022 and 2023, many first-time buyers continued to rent. In addition to increasing demand, this also reduced supply, which raised rents.

The higher average rent growth over the last three years has been bolstered by a strong increase in average earnings. Higher housing costs, however, have put a greater strain on living expenses for state-reliant individuals and private renters with lower incomes.

According to the government's English Housing Survey, which was released earlier this month, people who rent privately typically spend 34% of their income on rent, whereas people who have mortgages spend 19%.

"The exorbitant cost of rent is consuming large portions of people's income, making it extremely difficult to build a deposit. It is no wonder that millions of people risk being caught in the rental trap," says Sarah Coles, head of personal finance at Hargreaves Lansdown.

Because of improvements in the mortgage market for first-time buyers and a decrease in migration for work and education, rental inflation is currently at its lowest level in four years, according to Donnell at Zoopla.

For first-time homebuyers and those with small down payments, the government last week announced a new mortgage guarantee program of 95 percent.

Yet, Donnell cautions that rents will continue to be high. "Due to low landlord investment, the stock of homes has stayed stagnant for nearly ten years. Rents are steadily rising as a result of an ongoing supply/demand imbalance.