Understanding Rent Inflation and Affordability in England

Rent levels are central to housing debates, affecting tenants, landlords, and policymakers differently. Tenants feel the immediate pressure of monthly rent payments, while landlords face challenges such as void periods, refinancing risks, arrears, and the viability of letting properties commercially. Politicians often discuss rent as a single figure moving in one direction, but the reality is more complex, with different measures capturing different aspects of the rental market.

Three key concepts are often conflated in discussions about rent:

• Rent inflation – the rate at which rents change over time across the entire private rented sector, measured by indices such as the Office for National Statistics (ONS) Price Index of Private Rents.
• Asking rents for new lets – data drawn from listings and agent reports, reflecting the margin of the market and often more volatile.
• Affordability – the proportion of household income spent on housing costs, reflecting tenants’ lived experience and financial pressure.

Disagreements about rent trends often stem from confusion over which measure is being referenced.

Rent Inflation in England: 2010 to 2025

The ONS provides a chain-linked historical series for private rents in England, which, despite a methodology change around January 2015, offers a clear picture of rent inflation trends over the last 15 years. The data shows four distinct phases:

• 2010 to 2016: Steady rent growth averaging between 1.5% and 3.5% annually.
• 2017 to 2021: A subdued period with notably low inflation, including just 0.8% in 2018.
• 2022 to 2024: A sharp acceleration in rent inflation, peaking at 8.73% in 2024.
• 2025: A moderation in growth to 4.71%, still elevated compared to the late 2010s.

This cyclical pattern challenges the notion that rents have been rising rapidly and continuously since 2010. For several years before 2022, rent inflation was modest, highlighting the importance of context when interpreting rent data.

Why Rent Headlines Often Contradict Each Other

Different rent measures can produce seemingly conflicting headlines. Asking rents for new lets tend to react quickly to market changes, showing early signs of pressure or relief. In contrast, the ONS rent index reflects the broader stock of tenancies and changes more gradually. Thus, asking rents may cool while overall rent inflation remains positive.

For example, Property118 has reported both “stability” during subdued periods and “record highs” during acceleration phases, reflecting these different data sources. Understanding these distinctions helps landlords and agents interpret market signals more accurately.

Affordability Remains a Persistent Challenge

While rent inflation measures the rate of change, affordability reflects the ongoing financial burden on tenants. According to the English Housing Survey 2022 to 2023 affordability fact sheet, private renters spend on average 32% of their household income on housing costs. This share has remained broadly stable over time but represents a structurally tight situation for many households.

For landlords, this means that even when rent growth slows, tenants may still face significant financial pressure. Periods of rapid rent inflation can quickly push household budgets from manageable to strained, influencing tenant behaviour and demand.

The Rent Control Debate and Market Cycles

Calls for rent controls tend to intensify during periods of accelerating rent inflation and tightening affordability. Property118 has documented these political pressures, including local campaigns for rent control powers in England. Conversely, lenders and market participants warn that rent caps could reduce investment incentives and affect supply.

Evidence suggests rent growth follows cycles, so the timing of policy interventions matters. Measures introduced at the peak of a cycle may have different effects than those implemented during subdued periods. Impacts will also vary by region, tenancy type, and local supply-demand balances.

Implications for Landlords and Letting Agents

The long-run data underscores two key points for landlords and agents:

• Rent inflation has not been persistently extreme since 2010; there have been extended periods of modest growth.
• Even when rent growth moderates, affordability pressures can remain significant for tenants.

This nuanced understanding helps landlords make informed decisions about rent setting, portfolio management, and engagement with tenants. It also highlights the importance of monitoring multiple data sources to gauge market conditions accurately.

Enhancing Housing Supply Data Through Research

Recognising the complexity of rent dynamics and landlord decision-making, Property118 is expanding its housing research panel to gather real-time data on landlord sentiment, supply intentions, refinancing conditions, and sector confidence. This initiative builds on previous collaborations with academic institutions and aims to provide transparent, repeatable indicators to improve public understanding of the private rented sector.

Landlords participating in the Property118 Inner Circle Research Panel contribute anonymously to surveys covering portfolio plans, mortgage gearing, management styles, tenant types, and regulatory pressures. This data will support more evidence-based housing policy and market analysis.

Conclusion

Rent inflation in England since 2010 has followed a cyclical pattern with periods of moderate growth, subdued inflation, sharp acceleration, and recent cooling. Affordability remains a critical issue despite fluctuations in rent inflation rates. For landlords and letting agents, appreciating these trends and the differences between rent measures is essential for navigating the private rented sector effectively.