London rental affordability improves as salary falls 17%
The salary required to rent an average home in London has fallen by 17% year-on-year, marking a significant shift in the capital’s rental market, according to data from Propertymark’s latest Rental Price and Average Salary Tracker.
The trade body’s analysis shows the representative annual salary needed to secure an average-priced rental property in London dropped from £86,250 in June 2025 to £71,550 in June 2026. This represents the largest improvement in rental affordability among major UK regions.
Regional variations
The North West recorded a similar improvement, with the typical salary requirement falling 17.5% year-on-year from £40,350 to £33,300. Scotland experienced the most substantial monthly rental decline, with average rents falling from £1,257 to £1,186 between May and June, a decrease of 5.7%.
However, the salary required to secure a home in Scotland remained largely unchanged, rising just 1% year-on-year to £35,580. This shift in rental dynamics comes as demographic changes reshape the rental sector across the UK.
Regional trends remained mixed in June. London, the North West and the South East recorded monthly rent increases of 3.4%, 2.1% and 1.7% respectively. Wales and the West Midlands saw rents fall by 0.4%, while Yorkshire and Humberside experienced a 1% decline.
National picture
Across the UK, the average monthly rent stood at £1,500 in June, up 2.3% from the previous period. The representative annual salary needed to rent an average-priced home nationally was £45,000.
Kim Lidbury, ARLA Propertymark president, noted that while rents continue to rise in certain areas, other regions are experiencing more stable pricing or modest declines. “Encouragingly, the typical salary needed to secure a rental property has fallen across most regions compared with a year ago, with London and the North West seeing particularly notable improvements,” Lidbury said.
However, Lidbury cautioned that affordability pressures remain significant as rents continue to sit well above historic levels and demand for quality rental homes continues to outstrip supply. The sector faces ongoing challenges, with consolidation activity among lettings agencies reflecting changing market conditions.
Outlook
Lidbury emphasised that increasing the supply of privately rented homes would be essential to improve tenant choice and help moderate rental costs over time. The data suggests that while affordability has improved in absolute terms for some regions, the rental market remains under pressure from structural supply constraints.
