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Data from Propertymark suggests the salary needed to afford an average London rental home fell about 17% over the year to June 2026, from roughly £86,250 to £71,550, as earnings rose while rent growth slowed sharply. Affordability has improved in relative terms, but cash rents remain high and demand still outstrips supply.

Key takeaways

  • Propertymark's Rental Price and Average Salary Tracker suggests the salary needed to afford an average London home fell about 17% over the year to June 2026, from around £86,250 to £71,550.
  • The improvement reflects earnings rising while London rent growth has slowed sharply, rather than a fall in cash rents, which remain high.
  • ONS data shows London had the lowest annual rent inflation of any English region at around 2.0% in the year to May 2026, well below the wider UK figure.
  • The picture is uneven: Propertymark found affordability improved in most regions but worsened in Scotland, and rents still sit well above historic levels.
  • The Renters' Rights Act 2025 is reshaping the market, with Section 21 no-fault evictions due to end on 1 May 2026, adding uncertainty about future supply.

London's rental market, long a byword for punishing costs, has shown signs of becoming a little less forbidding for tenants. Data from the trade body Propertymark suggests that the salary a renter would need to afford an average home in the capital fell by around 17% over the year to June 2026, from roughly £86,250 to £71,550. The shift does not mean rents have dropped in cash terms; rather, it reflects wages rising while the pace of rent increases has slowed sharply. After several years in which London rents climbed faster than pay, the balance has tilted modestly back towards tenants. The obvious question is whether this marks a genuine, durable improvement in affordability, or a temporary easing in a market that remains stretched by weak supply and stubbornly high price levels.

What the data shows

The 17% figure comes from Propertymark's Rental Price and Average Salary Tracker, which estimates the income a household would need to afford the average rent in each region. Over the year to June 2026, that required salary in London fell from about £86,250 to £71,550. On the same measure, the North West saw a similar improvement of roughly 17.5%, with the required salary falling from about £40,350 to £33,300.

It is important to be precise about what this metric captures. It is not a statement that rents have fallen. Propertymark reported an average London rent of around £2,385 a month in June 2026, and noted that rents continue to sit well above historic levels. The required-salary figure improves when earnings rise and rent growth slows, narrowing the gap between what tenants earn and what landlords charge. In that sense, affordability has improved in relative terms rather than through cheaper rents.

Official statistics support the underlying trend. The Office for National Statistics reported that private rent inflation in London was the lowest of any English region, at around 2.0% in the year to May 2026, compared with about 3.4% for England and 3.3% for the UK as a whole. The ONS put the average London rent at roughly £2,294 a month. The two data sources use different methods and samples, so their absolute figures differ, but both point to London rent growth having cooled markedly from the double-digit rates seen in 2022 and 2023.

That divergence between London and the rest of the country is itself notable. For much of the past decade, the capital tended to lead national rent trends, with increases there rippling outwards. The recent pattern, in which London lags behind England as a whole, marks a reversal. It suggests that the capital reached the limits of what tenants could afford earlier than other regions, forcing rent growth to level off first. Whether that leadership role reasserts itself, in either direction, will be an important signal for the market.

Why it matters

For tenants, even a relative improvement in affordability is significant. London has some of the highest rents in the country, and housing costs consume a large share of many renters' incomes. A narrowing gap between pay and rent can ease budget pressure, free up spending for other essentials and, at the margin, make the capital more accessible to workers who might otherwise have been priced out.

For the wider economy, London's rental costs matter beyond the housing market. High rents can deter workers from moving to the capital, contributing to labour shortages in sectors that depend on lower-paid staff. Housing costs also feed into inflation measures and shape decisions on pay. A calmer rental market may therefore have knock-on benefits, though the effects are gradual and easily reversed if supply tightens further.

For landlords and investors, the same trend reads differently. Slower rent growth, combined with higher borrowing costs and a heavier regulatory burden, has squeezed returns for some. How landlords respond, whether by holding, selling or adjusting rents, will influence supply and, ultimately, the affordability picture that tenants face in the months ahead.

The interplay between these groups is what makes the outlook so hard to call. An easing that benefits tenants in the short term can, if it discourages investment, sow the conditions for renewed tightening later. Policymakers face a similar balancing act: measures that strengthen tenant protections may improve security and fairness, yet risk reducing the number of homes on offer if landlords conclude that letting is no longer worthwhile. The affordability figures capture a moment in this cycle rather than its endpoint.

The market context

London's rental affordability has to be understood against an extraordinary run-up in costs. In the aftermath of the pandemic, demand rebounded sharply as workers returned to the city and international arrivals resumed, while the supply of homes to rent failed to keep pace. The result was a period of exceptionally rapid rent inflation that stretched tenant budgets to their limits.

That surge appears to have run its course, at least for now. Rent growth has decelerated as affordability constraints bite: there is a natural ceiling to how much of their income tenants can devote to housing, and in a high-cost market like London that ceiling is reached sooner. At the same time, earnings have continued to rise, helping the required-salary measure to improve even as cash rents edge higher.

Supply remains the central constraint. Propertymark noted that demand for quality rental homes continues to outstrip supply, a persistent feature of the London market. The number of homes available to rent has been constrained by landlords leaving the sector, limited new construction and the conversion of some properties to other uses. Unless supply improves, any affordability gains could prove fragile.

The Renters' Rights Act and the regulatory backdrop

Looming over the market is a substantial change in the law. The Renters' Rights Act 2025 is being implemented in phases, with a central milestone on 1 May 2026, when Section 21 no-fault evictions are due to be abolished. From that point, fixed-term assured tenancies are to be replaced by periodic tenancies, giving tenants greater security and the ability to leave with two months' notice.

The Act introduces further protections. Rent increases are to be limited to once a year, with landlords required to give advance notice, and practices such as rental bidding wars and demands for large amounts of rent in advance are to be curtailed. Discrimination against families or benefit recipients is to be banned, and councils are being given expanded enforcement powers, with some new investigatory powers taking effect from late December 2025. A landlord ombudsman and a private rented sector database are planned for later phases.

The reforms are widely seen as strengthening tenants' hands, but their effect on affordability is not straightforward. Supporters argue that greater security and limits on mid-tenancy increases will help renters. Some landlords and industry figures caution that added costs and reduced flexibility could prompt more to leave the sector, tightening supply and putting upward pressure on rents over time. The net outcome remains uncertain and will depend on how landlords respond in practice.

How even is the improvement

The affordability gains are not uniform. Propertymark's data indicated that the required salary to rent fell in most regions over the year, but not everywhere: Scotland was cited as an exception, where the required salary edged higher rather than lower. This unevenness is a reminder that national or headline figures can mask sharp local variation.

Within London itself, averages conceal wide differences between boroughs and property types. Rents and affordability vary enormously between central and outer areas, and between one-bedroom flats and family homes. A single citywide figure, however striking, cannot capture the experience of a tenant searching for a specific type of home in a particular neighbourhood, where conditions may be considerably tighter than the average implies.

The measure itself also carries caveats. The required-salary approach depends on assumptions about how much of income should go on rent, and on the accuracy of average rent and earnings data. Different providers use different methods, which is why Propertymark and the ONS report different absolute figures even as they agree on the broad direction. Readers should treat the 17% as a well-sourced but specific indicator rather than a definitive verdict on affordability.

It is also worth noting what the figure does not tell us. A lower required salary does not necessarily mean that more homes are within reach, since availability depends on how many suitable properties are actually on the market at a given moment. Nor does it reflect the upfront costs of moving, such as deposits, which remain a substantial barrier for many prospective tenants in the capital. Affordability, properly understood, is broader than any single ratio can convey.

Key risks and uncertainties

The most important uncertainty is supply. If landlords continue to exit the market or new construction stalls, the pool of available homes could shrink further, reversing recent affordability gains regardless of what happens to wages. The rental market has repeatedly shown how quickly conditions can tighten when demand outpaces the homes on offer.

Macroeconomic factors add further uncertainty. The path of earnings growth, employment and interest rates will all shape affordability. Should pay growth slow while rents resume climbing, the required-salary measure could deteriorate again. Equally, the impact of the Renters' Rights Act on landlord behaviour will only become clear over time, and could push the market in either direction.

There is also a data caveat worth repeating. Rental statistics are compiled by various bodies using different methodologies, and short-term movements can be noisy. A single year's improvement, while genuine on the measures cited, does not by itself establish a lasting trend. Caution is warranted before concluding that London has decisively become more accessible.

What to monitor next

Several indicators will show whether the improvement endures. ONS private rent figures for London, released monthly, will reveal whether rent inflation stays subdued or reaccelerates. Measures of rental supply, including the number of homes listed and the ratio of prospective tenants to available properties, will signal whether the market is loosening or tightening.

The rollout of the Renters' Rights Act, particularly the abolition of Section 21 from 1 May 2026 and any resulting shift in landlord activity, will be a key development to watch. Trends in earnings growth and employment in the capital will determine how far pay can keep pace with rents. Together, these signals will indicate whether the affordability improvement of the past year proves to be a turning point or a pause.

House price movements are also relevant, since the sales and rental markets are linked. The ONS noted that London had recorded several consecutive months of annual house price declines, which can pull in either direction: softer prices may tempt some renters into buying, easing rental demand, but they can also prompt would-be sellers to let their properties instead, adding to rental supply. Watching how these markets interact will help clarify where affordability heads next.