Rent prices continue to spiral upwards. According to the ONS, the average private rents in the UK have increased by 6.7% from June 2024 to June 2025, with the current average monthly payment standing at £1,344. This increase is situated within a wider pattern of annual rent increases across the country, exacerbated by the lack of proportionate real wage growth to accommodate rising affordability costs.
As a result, an increasing number of renters are finding it difficult to save enough money for a deposit. The financial struggles are blocking the opportunity for renters, many of whom view renting as a preliminary step towards acquiring a property, from participating in the UK property market.
Rent Challenges
All parts of the country have experienced continual increases in rent prices. In some regions, these increases have been sharp. Between July 2024 to July 2025, according to the ONS, the biggest increases in monthly rent are Yorkshire & Humberside at 4.5% (£920), Wales at 4.4% (£933), Northern Ireland at 3.8% (£935), North West at 2.3% (£1,082), and West Midlands at 2.3% (£1,026). In some areas of London, the average advertised rent has reached as high as £2,712 per month.
Such increases, straining as they are for renters, are set to continue. Lendlord has revealed that 58.5% of landlords who took part in its latest survey have already raised rent prices over the past year. Further, 36.3% of the landlords surveyed are planning on increasing rent prices over the next six months, and 30.4% will evaluate whether to increase rent based on how the market unfolds over the same period.
Aviram Shahar, co-founder and CEO of Lendlord, argued that ‘our latest survey shows that most are taking a measured approach to rent increases despite ongoing pressures,’ adding: ‘Many [landlords] are raising rents, but they’re doing so cautiously, balancing inflationary pressures with tenant stability. Our data shows demand remains high, with very low vacancy rates across the board, and landlords are carefully monitoring the potential impact of regulatory change.’
Nathan Emerson, CEO of Propertymark, said: ‘Many landlords in the private rented sector have faced significant increases to their overall costs, with tax hikes, mortgage rises, as well as continuous regulatory hurdles, which are ultimately making investment less attractive and potentially more risky. This has played a key factor in rent rises, as well as worsening the gap in supply and demand levels.’
The chasm between rent increases and monthly mortgage payment increases has closed. Since 2022, the average monthly repayment has increased by £218, whereas the average monthly rent price has increased by £221. Considering the enormous challenges the mortgage industry faced when the bank rate stood at 5.25% for a year, the fact that rent increases narrowly surpassed mortgage repayment increases is alarming.
Saving Expectations
According to Barclays Property Insights, 44% of renters see a deposit as one of the biggest hurdles to acquiring a property. Of those surveyed, the average time a renter expects to save money before acquiring a property is approximately 4.5 years.
To account for the general affordability challenges, 51% are cutting back on everyday discretionary expenditure, and 45% are taking fewer domestic or international holidays. Additionally, 40% of those surveyed stated that they have pursued side work while working their main job, while 31% have taken on additional hours. Yet even with these additional measures, Barclays concluded that so far ‘renters have said they are largely falling short, with the average figure coming out at £253.90 per month.’
Categorised based on age generations, Gen Z renters save an average of £191 per month, while millennials average a saving of £313 per month. However, to reach a deposit of £30,000 in just under five years, a renter would need to be setting aside £500 a month. 17% of renters, however, are unable to commit to a set amount – instead choosing to put money aside whenever the opportunity presents itself.
As such, many renters are feeling the pressure of being unable to effectively save in a timely manner. There is, in many respects, a rush to exit the property market, aware that a landlord may continue to bump up rent prices over the coming years.
Future Considerations
The rental sector has increasingly become less attractive. As long as rent prices increase against real wage growth, the expectation for the number of years to save for a deposit may likewise continue to increase, and this is therefore making the rental sector undesirable for many consumers.
Richard Lane, chief client officer at StepChange Debt Charity, summarised: ‘The last five years have hit household finances hard, but few have felt it more sharply than those in the private rented sector. The majority of our clients struggling with debt are renters, with a third in the PRS (private rented sector).’
Such struggles will continue to play a major factor in the diminishing number of renters able to sufficiently save for a deposit.
