Rental inflation in England has slowed to its lowest rate in three years, according to figures published by the Office for National Statistics on Thursday. Average rents rose by 4.2 per cent in the year to June, down from a peak of 9.7 per cent in late 2023. For renters who have spent the past four years watching their housing costs spiral, this might sound like good news. In practice, it is more complicated.
The slowdown in rental growth does not mean rents are falling. It means they are rising more slowly than before. Average rents in England are now 28 per cent higher than they were in 2021. For someone renting a two-bedroom flat in London, that represents an additional £400 to £600 per month compared to four years ago. Wages have not kept pace. The proportion of take-home pay that the average private renter spends on housing has risen from around 30 per cent to over 38 per cent over the same period.
The government's Renters' Rights Act, which came into force in January, has introduced new protections for tenants — abolishing no-fault evictions, strengthening deposit rules, creating a new ombudsman. Housing campaigners broadly welcomed the legislation but argued it did not address the fundamental supply problem: there are not enough homes, particularly in the cities where employment is concentrated, and building more of them remains politically and practically difficult.
For younger renters in particular, the situation has reshaped expectations. A survey published last month found that 62 per cent of renters aged 25 to 34 did not expect to own a home in the next ten years. In 2015, the equivalent figure was 38 per cent. The shift in expectations is itself a social change of some significance.