UK rents are expected to grow by 12.0% over the next five years, according to property firm Savills’ latest rental forecast.
The report showed that rental affordability should improve during this period as income growth remains relatively high and demand eases.
Rental growth is forecast at 2.5% in 2025, dropping to 2.0% for 2026 and 2027, before returning to 2.5% for the final years.
London rents are set to rise by 11.5% over the same period.
Emily Williams, director of research at Savills, said: “The private rented sector has been uncharacteristically turbulent over the past few years.
“Rental growth at a macro-level is typically very closely linked to income growth, but that trend has been turned on its head in recent years, with growth peaking at 12% in the year to August 2022.
“As a result of this divergence, the average renter spent a third (32.4%) of their gross household income on rent in 2025 – up from 30.4% five years earlier.”
Williams added: “This marks the largest worsening in rental affordability since at least 2006, and probably since the early 1990s.
“However, as demand levels start to settle, our forecast indicates that conditions over the next five years are expected to return to more normal levels, with rents increasing at a rate between inflation and income growth.
“Any significant disruption to supply caused by the Renters Rights Act and other regulation of the market is the key risk to this outlook.”
She said: “As it stands, the main risk to our forecast is the potential for another surge in net migration, or a major supply shock on a similar scale.
“So far, the outflow of landlords from the private sector has been gradual, however, now that the Renters’ Rights Act is law, it is vital that being a landlord remains profitable and appealing.
“If investment into the sector shrinks further, we could see a supply-side shock to match the demand surge that has already made renting so difficult in recent years.”
