UK rental affordability showed signs of improvement over the past year as the average salary required to secure a home in London dropped 17 per cent to £71,550, according to data from Propertymark. Despite this localized relief, national rental demand remains high, with the Royal Institution of Chartered Surveyors (RICS) reporting the strongest growth in tenant interest since May 2025.
London Rental Market Dynamics
London’s rental market remains expensive in the UK, with average monthly rents reaching £2,385, according to data sourced from 15,000 agencies by Propertymark. While the salary requirement to rent in the capital has decreased by 17 per cent year-on-year, costs remain 59 per cent higher than the national average of £1,500 per month.
The easing of affordability pressures is not uniform. While some regions have seen stabilization, London and the South East experienced monthly rent increases of 3.4 per cent and 1.7 per cent respectively in June. Kim Lidbury, president of ARLA Propertymark, noted that these figures highlight the "different pace of rental markets across the country," with some areas seeing modest declines while others continue to face upward pressure on pricing.
Regional Affordability Trends
Outside of London, the North West of England has seen a notable shift in accessibility. The average salary required to rent a home in the region fell by 17.5 per cent year-on-year, bringing the necessary income to £33,300.
However, the national picture remains volatile. Scotland has become less affordable in terms of tenant salary requirements, contrasting with the improvements seen in the North West. Market data indicates that rental growth remains a persistent trend, with agents surveyed by RICS expecting an average increase of rental growth of 2.5 per cent over the next 12 months.
Supply Constraints and Regulatory Impact
The rental sector is currently grappling with a supply-demand imbalance that continues to drive market expectations. RICS reported that a net balance of 18 per cent of agents observed rising tenant demand over the past three months. Conversely, a net balance of 18 per cent of agents reported a decline in new rental instructions from landlords.
This contraction in supply is partially attributed to the evolving regulatory environment. Feedback from agents, such as Colin Townsend of John Goodwin in Malvern, suggests that the implementation of the Renters’ Reform Act has prompted some landlords, particularly those with smaller portfolios, to exit the market.
Market Metrics at a Glance
| Metric | Trend/Status |
|---|---|
| London Avg. Rent | £2,385 |
| London Salary Req. | £71,550 (Down 17 per cent) |
| NW England Salary Req. | £33,300 (Down 17.5 per cent) |
| Expected 12-Month Rent Growth | 2.5 per cent |
| Tenant Demand (RICS) | 18 per cent net balance increase |
As the market adjusts to new legislative standards, the disparity between supply and demand is expected to maintain upward pressure on rental costs, even as salary requirements for tenants show localized fluctuations.
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