UK rents are set to rise by 12% over the subsequent 5 years, in accordance with Savills, because the market returns to extra regular and predictable situations.
Savills’ five-year rental forecast expects rental affordability to enhance over the five-year interval, as earnings progress stays comparatively excessive and demand eases.
Rental forecasts (2026-2029)
| 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2026-30 | |
| UK rental progress | 2.5% | 2.0% | 2.0% | 2.5% | 2.5% | 2.5% | 12.0% |
| London rental progress | 2.0% | 1.5% | 1.5% | 2.5% | 2.5% | 3.0% | 11.5% |
| UK Earnings progress | 3.3% | 2.4% | 2.4% | 3.4% | 3.2% | 2.9% | 15.3% |
Supply: Savills, Oxford Economics
“The personal rented sector has been uncharacteristically turbulent over the previous few years. Rental progress at a macro-level is often very carefully linked to earnings progress, however that development has been turned on its head in recent times, with progress peaking at 12% within the yr to August 2022,” mentioned Emily Williams, director of analysis at Savills.
“Because of this divergence, the common renter spent a 3rd (32.4%) of their gross family earnings on hire in 2025 – up from 30.4% 5 years earlier. This marks the biggest worsening in rental affordability since at the least 2006, and doubtless because the early Nineties.
“Nonetheless, as demand ranges begin to settle, our forecast signifies that situations over the subsequent 5 years are anticipated to return to extra regular ranges, with rents rising at a price between inflation and earnings progress. Any vital disruption to produce brought on by the Renters Rights Act and different regulation of the market is the important thing threat to this outlook.”
Demand points outweigh lack of provide
The UK rental market has confronted persistent provide challenges over the previous decade. In keeping with Savills, landlord directions to let houses have been declining since 2017, resulting from a mix of tax reforms, rising rates of interest and anticipated regulatory adjustments, which have made buy-to-let funding much less enticing, prompting some landlords to exit the market.
On the similar time, the dimensions of Construct to Hire stays inadequate to fill the hole, averaging simply 15,000 completions yearly towards a backdrop of 4.9 million households within the personal rented sector, says Savills.
Nonetheless, excessive demand has performed an much more vital function. The RICS survey recorded unprecedented tenant demand between 2021 and 2023, resulting from a post-lockdown spike in exercise and a pointy rise in internet migration, which has resulted in 600,000 further households over 5 years.
This inflow equates to a ten% improve in demand inside the personal rented sector over simply two years.
Return to regular market situations
Savills’ forecast expects demand ranges to fall again according to the extra regular market situations of the 2010s. This comes as first-time purchaser numbers have additionally been elevated throughout 2025, because of easing lending guidelines, which have elevated the movement of households out of the personal rented sector, and internet migration numbers have additionally eased.
In keeping with HomeLet, the common hire as a share of earnings has declined from 33.4% on the finish of 2023 to 32.4% within the third quarter of 2025, indicating an early motion again towards the long-term development.
Over the subsequent 5 years, Savills expects rents to proceed to regulate accordingly, with progress anticipated to align between the charges of CPI inflation and family earnings progress.
“Because it stands, the primary threat to our forecast is the potential for one more surge in internet migration, or a significant provide shock on an identical scale,” continued Williams.
“Thus far, the outflow of landlords from the personal sector has been gradual, nevertheless, now that the Renters’ Rights Act is legislation, it’s vital that being a landlord stays worthwhile and interesting. If funding into the sector shrinks additional, we may see a supply-side shock to match the demand surge that has already made renting so troublesome in recent times.”
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