Renters spend higher share of income on rent despite falling prices

Renters spend higher share of income on rent despite falling prices

UK renters allocated a larger portion of their income to rent in October 2026, even though average rents decreased slightly from September, according to the HomeLet Rental Index.

UK renters spent an average of 32.7% of their income on rent in October 2026, up from 32.1% in September, despite average rents falling by 0.9% month on month to £1,375. The average rent remained 2.2% higher than in October 2025. Outside Greater London, average rents dropped 1.0% to £1,164, with renters spending 31.1% of their income on rent, up from 30.5% in September.

HomeLet Rental Index details regional rent trends

The South East experienced the largest monthly rent decrease at 2.7%, with average rents falling to £1,432. Scotland saw a 2.6% monthly fall to £1,026 but recorded the strongest annual increase at 4.8% compared to October 2025. Greater London remained the most expensive region with an average rent of £2,260, down 0.5% from September but 1.9% higher year on year.

The North East had the lowest average rent at £727, while the East Midlands was the only region to record an annual rent decrease, down 0.6% to £925. Northern Ireland tenants spent the highest proportion of income on rent at 39.4%, though this was slightly down from 39.7% in September. London followed with 38.9%, up from 37.9% the previous month. Scotland had the lowest proportion of income spent on rent at 26.8%, up from 26.4% in September.

Context of rising rent burden despite falling rents

The increase in the share of income spent on rent despite falling average rents suggests that tenant incomes have not kept pace with rent levels. This trend highlights ongoing affordability challenges in the private rented sector. Although rents have eased slightly month on month, the overall year-on-year increase and the rising income share indicate that many tenants face growing financial pressure.

For landlords and letting agents, this data underscores the importance of understanding tenant affordability and the potential impact on rent collection and tenancy sustainability. Regions with higher rent burdens, such as Northern Ireland and London, may see increased tenant vulnerability, which could influence arrears rates and tenancy turnover.

Practical implications for landlords and agents

Landlords should monitor local rent trends and tenant income levels to assess affordability risks within their portfolios. While average rents have fallen slightly, the rising proportion of income spent on rent means tenants may be more sensitive to rent increases or other cost pressures. This could affect demand and tenancy renewals, particularly in higher-cost areas.

Letting agents need to advise landlords on setting rents at sustainable levels to minimise arrears and void periods. They should also be alert to the regional variations in rent burden and income growth, tailoring management strategies accordingly. Understanding these dynamics can help agents support landlords in maintaining stable tenancies and compliance with affordability-related regulations.

Uncertainties and what to watch

It remains uncertain how tenant incomes will evolve in the coming months and whether rent levels will continue to adjust. Economic factors such as inflation, wage growth, and employment rates will influence affordability and rental market dynamics. Landlords and agents should keep abreast of official data and guidance to anticipate changes that may affect rental income and tenant stability.

Additionally, policy developments around tenant protections, rent controls, or housing support could alter the balance between rent levels and tenant affordability. Monitoring government announcements and sector research will be essential for managing risk and compliance in this evolving environment.

Considerations for landlords now

Landlords should review their rental pricing strategies in light of affordability pressures and regional rent trends. Assessing tenant income data where possible and considering flexible rent arrangements may help maintain tenancy sustainability. Keeping detailed records of rent reviews, tenant communications, and any concessions is advisable to demonstrate compliance and good practice.

Letting agents can support landlords by providing up-to-date market intelligence and advising on rent setting that balances income goals with tenant affordability. They should also ensure tenancy agreements and notices comply with current legislation, especially if affordability issues lead to rent arrears or disputes.

Supporting landlords with compliance and portfolio management

The Landlord Association (TLA) membership offers landlords and letting agents access to practical compliance resources and tools to manage rental portfolios effectively. TLA’s new property management and compliance platform, ORBIT, currently available in BETA testing, is designed to help organise properties, manage rental documents, and keep evidence of compliance activities in one place. Features under development include tools to record rent reviews, tenant communications, and property inspections, which are particularly relevant amid changing affordability conditions.

Members can also use TLA’s AI Document Studio for tenancy agreements, notices, and letters, ensuring documentation aligns with current legislation. The TLA Portfolio Health Check supports landlords in monitoring deadlines, deposits, and licensing requirements, helping to maintain compliance and reduce risk. Exploring TLA membership and ORBIT BETA access can provide landlords and agents with structured support to adapt to rental market pressures and regulatory changes.

Looking ahead, landlords should maintain vigilance on rent affordability trends and regulatory updates. Proactive management and compliance will be critical to sustaining tenancies and protecting rental income in a market where tenants are allocating an increasing share of their earnings to rent.

Sources: Letting Agent Today