UK Private Renters’ Bill Hits £81 Billion in 2025

Private renters in the UK paid a total of £81.1 billion in rent to private landlords during 2025, according to research from property consultancy Savills. This figure forms part of a record £226.3 billion spent by households on housing costs, which includes both rent and mortgage payments. The total housing bill increased by £8 billion compared to 2024, marking a £66 billion rise over the past five years.

Of the £112 billion spent on rent overall, £30.9 billion was paid in social rent, with the remainder going to private landlords. Savills estimates the average annual rent in the private rented sector (PRS) stands at approximately £15,000 per household.

Slowing Growth in Housing Costs

Lucian Cook, head of residential research at Savills, noted that the rate of growth in housing costs has slowed significantly compared to 2023 and 2024. He explained, “In 2025, the burden of higher mortgage costs has been felt mainly by households coming off longer term fixed rate deals.” Meanwhile, rental growth has returned to more normal levels after previous years of rapid increases.

Cook also cautioned that the outlook for 2026 is uncertain, stating, “Until recently, 2026 looked set to offer some respite, but that is now less certain given the prospect of another wave of inflation, which mortgage markets are typically quick to price in.”

Regional Variations: London Leads in Housing Costs

Regional data reveals that London continues to bear the highest share of housing costs, with £53 billion spent in 2025. This represents 23.4% of the national total and is equivalent to the combined housing costs of Scotland, North East England, North West England, and Yorkshire and the Humber. Over five years, London’s housing costs have risen by £13.97 billion, a 36% increase.

Interestingly, London recorded the smallest percentage increase in housing costs compared to other regions. Northern Ireland experienced the largest five-year rise at 55%, while the North West, East Midlands, and East of England also saw increases exceeding 45%. London accounts for just under a third of the UK’s total private rent payments, highlighting its continued dominance in the rental market.

Implications for Landlords and Letting Agents

The data underscores the significant financial scale of the UK’s private rented sector and the continuing importance of rental income for landlords. The slowing growth in housing costs and rental prices may indicate a stabilising market, but landlords should remain alert to potential inflationary pressures that could affect mortgage costs and rental demand in 2026.

For letting agents and property managers, understanding regional variations is crucial. London remains the most expensive market, but other regions are experiencing faster growth in housing costs, potentially offering new opportunities or challenges depending on location.

Summary

The UK’s private rented sector continues to represent a substantial portion of household expenditure, with tenants paying £81.1 billion in rent in 2025. Although growth in housing costs has slowed, the overall burden remains high, particularly in London and regions with rapid increases in recent years. Landlords and agents should monitor these trends closely as they plan for the year ahead.

Suggested internal link anchors

• private rented sector
• housing costs
• rental growth
• mortgage costs
• regional housing markets
• London rental market
• social rent
• letting agents
• property management
• inflation impact on housing

TLA update

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