Rents outpace mortgages with 21% rise over three years

The average monthly cost of renting a home in the UK has risen by £221 in three years, outpacing the increase in mortgage payments over the same period.

According to property website Zoopla, the average repayment on outstanding mortgages, pushed up by higher mortgage rates, has only increased by £218 a month.

Renters also tend to pay more than homeowners. Average rents in the UK currently sit at £1,283 a month, with typical mortgage repayments sitting at £1,154.

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The 21% rise in rents since 2022 is due to demand for rented homes growing rapidly during 2022 and 2023 while the stock of private rented homes remained broadly static due to low levels of new investment by buy-to-let landlords.

Richard Donnell, executive director at Zoopla, points out that there’s been a big focus on interest rates rising and the impact on homeowners with mortgages - but that tenants have also faced steep increases in their costs.

“A shift to higher mortgage rates raised alarm over how mortgagees would be able to afford higher repayments over the last three years. The sales market has been resilient thanks to mortgage regulations that ensured borrowers could afford higher mortgage rates,” he comments.

“Renters have faced similarly steep increases in the cost of renting in recent years with rents pushed higher on strong demand and limited supply of homes for rent, which has hit lower income renters hardest.”

However, rent increases have slowed considerably. Last month, Zoopla said that rents are rising at their slowest pace in four years as tenant demand cools and affordability pressures start to bite. Average UK rents increased by 2.8% in the 12 months to April - less than half the 6.4% recorded last year.

Which UK areas have seen the biggest increase in rents?

Some local areas have seen particularly rapid increases in rents over the past three years as rental demand has run ahead of the growth in rental supply.

In places like Oldham, Wigan and Bolton, rents have surged by more than 31% in three years as rents rose from a relatively low base.

Rents are highest in London, with parts of the capital registering the largest monetary increases, up by £400 a month over the past three years. The biggest rental growth has been in more affordable areas in outer London, such as Ilford in east London.

Source: Zoopla Rental Index 2025

Why have rents risen so much?

The rise in the costs of renting since 2022 is down to a surge in rental demand in the wake of the pandemic.

According to Zoopla, a strong labour market and higher levels of migration for work and study have boosted rental demand. Mortgage rates spiked over 2022 and 2023, making it harder to buy homes, so many first-time buyers remained in the rental market for longer. This further boosted demand while also suppressing supply, pushing rents higher.

Robust growth in average earnings over the past three years has supported the faster growth in average rents. However, private renters on lower incomes and those relying on state support have faced a greater squeeze on living costs from higher housing costs.

Earlier this month, the government’s English Housing Survey revealed that on average, private renters spend 34% of their income on rent, while those with mortgages spend 19%.

Sarah Coles, head of personal finance at Hargreaves Lansdown, notes: “The eye-watering cost of rent is devouring huge chunks of people’s income, making it incredibly difficult to build a deposit – it’s no wonder millions of people risk being stuck in the rental trap.”

Donnell at Zoopla notes that rental inflation is now running at its lowest rate for four years, due to less migration for work and study, and improvements in mortgage market conditions for first-time buyers.

Last week, the government announced a new 95% mortgage guarantee scheme, which should help first-time buyers and home movers with small deposits.

However, Donnell warns that rents will remain high. “The stock of homes has remained static for almost a decade due to low investment by landlords. A continued supply/demand imbalance is keeping a steady upward pressure on rents”.