Soaring rents contribute to record high housing costs

UK housing costs reached a record high of £217 billion in 2024, driven by increased rents and mortgage payments. This marked a £19.8 billion (10%) rise from 2023, and costs were £8.6 billion higher than the previous peak in 2016, even after adjusting for inflation. Over the last two years, total housing costs have grown by £41.2 billion, accounting for 60% of the increase over the past decade.

Mortgage costs played a significant role, increasing by 32% in two years, with mortgage interest repayments being a major factor. The average annual cost for mortgaged homeowners rose to £12,754 in 2024, £2,829 more than in 2022, while unmortgaged homeowners remained unaffected. Renters faced higher expenses too, with the average renting household paying £14,458 annually, up by £2,195 over two years. Although rental growth slowed in 2024, historical increases continued to impact affordability.

London experienced the largest increase in housing costs (27% since 2022), followed by the East and West Midlands (25% each), while the North East saw the smallest rise (17%). Londoners bore a quarter of national housing costs, with tenants particularly affected by rental growth and higher mortgage costs.