Rent costs hit new record

More people in the UK are renting, and they're paying a growing share of their income to do so.

Rents reached 36.1% of average earnings in March 2025 - their highest level on record - according to the latest detailed annual review produced by the Chartered Institute of Housing. Demand for private rentals increased during the COVID pandemic and continued to rise as higher inflation and interest rates from 2022 made homeownership less affordable.

At the same time, the supply of new rental properties has fallen. Higher mortgage rates and recent tax changes for landlords, including increases to capital gains and income tax, have also led some smaller landlords to exit the market.

The Royal Institution of Chartered Surveyors (RICS) reports that tenant demand continues to outstrip the available supply of rental properties in the UK, with a "subdued" flow of new listings advertised. Tarrant Parsons, RICS head of market research and analysis, told Sky News: "Demand growth from tenants has eased in recent months, and some data shows more rental properties on the market than a year ago.

"Even so, the supply of rental homes remains well below pre‑pandemic levels. The RICS survey continues to report negative landlord instructions, indicating a shrinking flow of landlords entering the market.

With the Renters' Rights Act due to take effect in May, there's a risk that regulatory changes accelerate this decline." Mr Parsons added: "With supply unlikely to improve meaningfully soon, tenants in many areas will continue to face significant affordability pressures." See if your town has had one of the largest rent rises in the table below: Long-term impact of Right to Buy The latest UK Housing Review reveals the long-term impact of the Right to Buy policy, which enables social tenants to buy their homes at a discounted price. "Right to Buy has been very important in helping people access and buy their own homes," Gavin Smart, chief executive officer of the Chartered Institute of Housing, told Sky News.

"But you can't have the Right to Buy scheme without also paying attention to the consequences for the social rented sector and for replacing the homes that are lost. The report's authors argue that, over time, the biggest factor in rising rents has been the huge loss of social housing across the UK, with the sector shrinking from 31% of all households in 1981 to just 17% today.

Since 1981, 2.8 million homes have been sold under Right to Buy, up to March 2025. Only around 1.2 million of those homes have been replaced, resulting in an overall shortfall of 1.6 million homes.

Sky News analysis finds that Right to Buy sales have likely continued to outpace social housing replacement in recent months. In the first nine months of 2025-26, management data indicates that just under 11,000 local authority homes have been sold through Right to Buy, equivalent to a projected total of 15,000 for the full year.

This is compared to 12,198 social homes built in the latest year. 'Affordability crisis' Right to Buy sales are likely to decrease in the future following rule changes under Labour, which have reduced the discount for buyers and which "strikes a better balance.