Tenants need an annual salary of £74,520 to afford the average London home after rents in the capital climbed to £2,484 a month in July, new figures show.

London recorded the strongest monthly rental growth in the UK in July, with average rents rising 4.2% month-on-month, meaning that the representative annual salary needed to secure the average-priced rental home increased year-on-year by 6.4% from £70,050.

Propertymark reports that the North West saw the second largest monthly increase, with average rents rising from £1,110 to £1,131 (up 1.9%), while the representative salary needed increased from £32,700 to £33,930 (up 3.8% year-on-year).

Wales recorded the largest monthly rental decline, with average rents falling from £1,009 to £1,000 (-0.9% month-on-month). It was also one of the few regions to see an improvement in affordability year-on-year, with the representative salary needed falling from £30,510 to £30,000 (-1.7%).

Regional

Regional rental trends remained mixed, with rents also increasing in the West Midlands (+1.7%), the South East (+0.8%) and Scotland (+0.2%), while the North East (-0.9%), the South West (-0.7%), the East Midlands (-1.1%), the East of England (-0.2%) and Yorkshire and Humberside (-0.1%) all recorded monthly falls.

ARLA Propertymark president Kim Lidbury (pictured) says while it’s encouraging to see year-on-year rental growth moderating compared with the sharp increases seen in recent years, the underlying challenge remains unchanged.

Demand

“Demand for privately rented homes continues to significantly outstrip the supply available, meaning rents remain historically high despite slower rates of growth,” adds Lidbury. “Until more good quality homes are brought into the sector and policies to support investment by landlords, tenants are unlikely to see the meaningful reductions in rental costs that many are hoping for.”

Meanwhile, Twenty7tec reports that the buy-to-let sector continues to recover gradually, reflecting the different challenges facing landlords as they weigh up borrowing costs and longer-term investment decisions

The firm’s latest Mortgage Market Snapshot shows buy-to-let searches totalled 269,605 in July, down 2% compared with June and 2% lower than July 2025. Buy-to-let purchase searches fell 3% year on year, while buy-to-let remortgage searches were 6% lower, suggesting investors continue to take a measured approach.

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