ONS: Private rents rising faster than house prices

The cost of renting a home continues to rise faster than the value of the homes themselves. That’s according to the latest figures from the ONS.

Average UK private rents increased by 3.3% in the 12 months to June 2026. In contrast, average house prices rose by just 2.7% in the year to May.

It’s only a difference of 0.6 percentage points, but it highlights a familiar problem for aspiring homeowners. House-price growth may have slowed, but the monthly cost of remaining in rented accommodation is still moving upwards.

For renters trying to build a deposit, that can make the journey towards homeownership feel increasingly difficult.

The average UK rent has reached £1,388 a month

The average monthly private rent across the UK reached £1,388 in June 2026, £44 more than a year earlier.

In England, the average rose by 3.4% to £1,446 per month. Wales recorded the strongest increase among the UK nations, with rents rising by 4.9% to £843.

Average rents reached £1,012 in Scotland, an annual increase of 1.3%. Northern Ireland’s latest available figures showed a 2.9% rise to £877 in the year to April 2026.

The substantial regional differences within England

The North East recorded the highest annual rental growth at 6.3%. Even then, it’s still the least expensive English region in cash terms, with an average monthly rent of £781.

London recorded the slowest rental growth at 2.2%, year-on-year. Nevertheless, it’s comfortably the most expensive region, with the average rent reaching £2,302 per month.

Even though it’s a small rise, it’s a reminder that smaller increments don’t always mean that renters are finding conditions affordable. In areas where rents are already exceptionally high, even modest growth can increase pressure on household budgets.

House prices are rising more slowly

The average UK property was valued at £271,000 in May 2026. That’s an increase of 2.7%, year-on-year.

That 2.7% growth slowed from house prices’ annual growth of 3.9% in April. But the ONS explained that part of this slowdown was due to the unusually strong rise in prices recorded a year earlier, following Stamp Duty Land Tax changes in April 2025.

Based on April/May 2026 figures, average UK house prices increased overall by 0.3%.

In England, the average property value climbed to £292,000; that’s up 2.3% annually. In Wales, average house prices rose to £215,000. In Scotland, they rose to £196,000. These figures represent annual increases of 4.2% and 4.4%, respectively.

Once again, however, the national picture masks some pronounced regional differences.

House prices in the North East rose by 5.9% over the year, the strongest growth of any English region. At the other end of the scale, London prices fell by 3.7%. This latest drop represents the ninth consecutive month in which the capital recorded an annual decline.

The figures show that the North East currently has both the fastest rental growth and the strongest house-price growth in England. London, by contrast, has experienced the weakest performance in both measures. That said, the capital’s starting prices remain far higher than anywhere else in the country.

What do slow-moving house prices mean for renters hoping to buy?

At first glance, slower house-price growth could be considered encouraging news for long-suffering first-time buyers.

When property values are rising at a more measured pace, it gives buyers’ deposits and incomes a better chance of keeping up. Greater choice in some areas may also present opportunities. It reduces the pressure to rush into a purchase and/or stretch beyond a comfortable budget.

The difficulty is that renters don’t experience the housing market through house prices alone.

Every additional pound spent on rent is money that cannot be put towards:

• A deposit,
• Legal fees, or
• The wider costs of moving home.

These factors are particularly relevant when the average UK rent has risen by £44 a month in just a year.

All factors considered lead to a slightly uncomfortable contradiction in the latest figures. The property market may be becoming less heated. But the cost of waiting on the sidelines is still increasing.

The resultant scenario doesn’t mean buying will automatically be the right decision for everyone. Buyers still need to consider:

• Mortgage affordability,
• Interest rates,
• Job security, and
• Future financial goals.

What the scenario doesn’t negate is the value of finding out what may already be possible now rather than believing that homeownership is a pipe dream.

Your income may be more mortgageable than you think

Defining your income is particularly important for contractors, freelancers and other self-employed professionals.

A false assumption prevents many would-be buyers from speaking to a mortgage adviser. That’s because they believe their income structure will prevent them from securing a competitive mortgage. They may use a limited company, an umbrella firm, retain profit within their business or have only recently started contracting.

Those circumstances require more careful presentation to underwriters. But they don’t necessarily preclude someone from getting a great mortgage deal. Those payment structures may even enhance their opportunities through a specialist mortgage broker.

Different lenders assess non-standard income in different ways. Depending on the applicant, it may be possible to secure a great deal using:

• Contract earnings,
• A daily rate,
• Salary and dividends,
• Retained company profits, or
• More complex incomes, which use a combination of income sources.

Understanding those options early can help a prospective buyer establish:

• How much they may be able to borrow,
• The deposit they are likely to need,
• Which lenders may be suitable, and
• Whether anything should be improved before applying.

Even when buying a home isn’t immediately achievable, having a clear plan is better than blindly renting based on assumptions.

A specialist mortgage adviser can help you understand how lenders amenable to the flexible workforce will assess your income. They’ll then identify your available options and establish whether buying a home could be more achievable than you initially thought.

A market moving at two different speeds

Let’s be clear: the latest data don’t point to a booming housing market. House prices are rising modestly overall, with some regions performing far more strongly than others.

But they do show that the pressure facing renters is present, real, and moving in only one direction.

Rental inflation has slowed substantially from the peaks seen in previous years. But rents are still rising faster than property values nationally. For those trying to save while covering an increasingly expensive monthly rent, that distinction matters.

The decision to buy a home should never be rushed simply because rents are increasing. Equally, prospective buyers shouldn’t rule themselves out without first understanding their position.

For contractors and freelancers in particular, specialist mortgage advice could reveal that the route from renting to owning is closer than expected.

Thinking about buying your first home?

We specialise in helping contractors, freelancers and self-employed professionals secure mortgages based on the way they earn. We don’t use the outdated and often biased algorithms used by high street branches, call centres or comparison sites.

Speak to one of our specialist advisers to understand how much you could borrow based on your true affordability. We can find a lender best suited to your circumstances and payment structure. You’re closer to owning a home than you (probably) think right now.