Editor's note: This brief was summarised by The Property AI Team from a report by Property Industry Eye. Read the original article for full details.
Tenants Spend 32.7% of Income on Rent Despite Falling UK Rents
Tenants are spending a growing share of their income on rent, despite average rental prices falling across much of the UK. New figures from HomeLet's October Rental Index show tenants spent an average of 32.7% of their income on rent, up from 32.1% in September.
The increase came despite average UK rents falling 0.9% to £1,375 a month. Rents remain 2.2% higher than a year ago. Outside Greater London, average rents dropped 1% to £1,164, yet tenants in these regions now spend 31.1% of their income on rent, compared with 30.5% in September. Affordability pressures persist even as rental prices ease.
London Rents Fall but Affordability Worsens
Greater London remains the UK's most expensive rental market, with average monthly rents of £2,260. Although this represents a 0.5% monthly decline, rents remain 1.9% above October 2025 levels. London tenants now spend 38.9% of their income on rent, up from 37.9% in September.
Northern Ireland recorded the highest rental burden, with tenants spending 39.4% of their income on housing costs, though that figure fell slightly from 39.7% the previous month. Scotland recorded the lowest proportion at 26.8%, although this increased from 26.4% in September.
Rents Fall Across Several Regions
The South East recorded the largest monthly rental decline, down 2.7% to £1,432. Scotland followed with a 2.6% fall to £1,026, while the South West saw rents drop 1.3% to £1,258.
Despite the monthly decline, Scotland recorded the strongest annual rental growth at 4.8%. The South West followed at 4.5%, while Northern Ireland recorded a 3.9% annual increase. The East Midlands was the only region where rents fell year-on-year, down 0.6% to £925. The North East remained the cheapest rental market, with average rents of £727 a month.
Letting Agents Warned Over Tenant Affordability
Carrie Alliston, head of partnerships at HomeLet and Let Alliance, said tenants face growing pressure on household finances. "UK renters are spending almost a third of their income on rent – and that proportion is still rising."
She urged letting agents to pay close attention to affordability when assessing prospective tenants. "With affordability tightening for tenants, it's more important than ever to protect your rental income. That starts with a thorough referencing check that gives you a true picture of what a tenant can afford to help make a more informed decision."
Alliston also highlighted the financial risks landlords face when tenants experience changes in their circumstances. "But even a tenant who can comfortably afford the rent today could face a change in circumstances. And if they stop paying, landlords still have mortgage payments and bills to cover."
HomeLet's index tracks rents agreed on new tenancies rather than advertised asking prices. The company processes more than one million tenant references annually for over 5,000 UK letting agents. Its latest figures highlight a growing challenge for agents: assessing tenant affordability when rental costs remain high relative to incomes.
Source: Property Industry Eye