Rents soar by £221 in 3 years to outpace mortgage rises

Zoopla have reported that renters have seen a greater increase in their monthly housing costs in comparison to homeowners with a mortgage between 2022 and 2025.

Monthly rents have jumped £221 during this time, while the average mortgage repayment rose by £218, according to the Bank of England’s mortgage data.

This brings the new average rent in the UK to £1,283 per month compared to £1,154 for the average mortgage payment.

This is a result of ongoing high demand for homes in the private rental sector, while the stock of available rentals has failed to increase due to low levels of new investment by landlords.

Rent vs mortgage: comparing UK housing costs

Some parts of the UK have seen even higher rent increases in the last 3 years, as rental demand has outstripped supply in localised areas.

What’s causing the ongoing rent rises?

The increase in the cost of renting since 2022 is due to a surge in rental demand following the pandemic.

A strong labour market and higher levels of migration for work and study boosted demand, and the spike in mortgage rates in 2022-23 made it harder for first-time buyers to get on the ladder.

This has meant many first-time buyers have stayed in the rental market for longer, further boosting demand and pushing rents even higher.

Strong growth in average earnings over the last three years has supported the faster growth in average rents, whilst private renters on lower incomes and those relying on state support have faced an ever greater squeeze on living costs from higher housing costs.

Rental growth has started to slow and is now at lowest rate for 4 years

The good news for renters is that the growth in rental rates is now at its lowest rate for 4 years as demand has started to weaken due to improvements in the mortgage market for first-time buyers, as well lower levels of migration.

There’s also a ceiling to how much renters can afford to pay for rent or are willing to and as rents get closer to this level in local areas, the growth rate is slowing.

However, Zoopla are not expecting rents to go down any time soon and the difficulty to save for a deposit to fund ownership for first-time buyers means continued demand for rented homes in a market that’s had no real increase in supply for a decade.

The expert’s view: “The quickest way to alleviate high rents is to grow rental stock”

“Rental inflation for new lets has slowed to its lowest rate for four years which will be welcome news for Britain’s private renters,” says Richard Donnell, Executive Director at Zoopla.

“The quickest way to alleviate high rents is to grow the stock of homes for rent in both the social and private rented sectors. Growing housing supply is a key Government target and it’s vital that the stock of rented homes is expanded across all tenures.

“Renters have faced steep increases in the cost of renting in recent years. Rents have been pushed higher due to high demand and limited supply, hitting lowest-income renters the hardest.”

What’s the bottom line?

With rents rising faster than mortgage payments, now could be the time to weigh up your options, whether you’re a landlord looking to maximise returns, a tenant feeling the squeeze, or a first-time buyer exploring what’s possible.

The rental market may be shifting, but the need for trusted guidance remains constant.