Record-Breaking Rents Help Put UK Housing Expense on Record £217 Billion in 2024 – Stable Market for British Property Investors

The housing market of the British Isles has fulfilled all the hype and turned out resilient and robust even amidst increasing housing costs and rents. The recent Savills report says that UK housing expenses went up to a record high of £217 billion last year, growing by a remarkable £19.8 billion (10%) higher than the previous year. This increase in prices is not restricted to tenants, but also mortgage holders who are homeowners, hence making the UK property market more appealing as an investment tool, especially for buy-to-let investors.

A Closer Look at the Numbers

The total cost of housing in the form of private and social rents and owners' mortgage expenditures has increased significantly over the two years. 60% of the overall rise in housing expenditure over the last decade is provided by these. Indeed, the aggregate spending of 8.5 million mortgaged homeowners was £110 billion in 2024. That is to say, a typical mortgaged homeowner is now shelling out £12,754 per year—a £2,829 rise compared to 2022.

Though these figures may appear to be a cause of concern for property owners, the rise in property prices is an indication of a healthy and solid housing market, one in which demand is still pushing prices and rents higher. The rise in rent payments is also an indicator of the condition of the rental market, in which demand is outpacing supply, driving prices higher across the UK.

Rising Rents: A Bonanza for Investors

Rental payments, which reached a record £81 billion in 2024, are growing rapidly too. In total, tenants are now paying an average of £14,458 per annum—a rise of £2,195 over the last two years. Although growth in rents is easing somewhat, the sheer number of payments being made is still rising. This rise in rental charges is evidence of the strength of the rental market, especially for landlords and buyers seeking long-term yields.

Particularly, London has experienced the highest growth in house prices, which have gone up by 27% since 2022. The capital, which takes up 25% of the country's housing expenses, has managed to withstand the bulk of increasing rents, and it is thus a very good location for investors to tap into the high demand for rental properties. Regions within the East Midlands and West Midlands have also witnessed sharp growths in house prices, further lending credence to the investment proposition of these emerging areas.

Affordability Pressures and Increased Investment Opportunity

As the affordability of housing has become a public issue for many renters, including large numbers of renters in London, this represents an opportunity for real estate investors who are experiencing a secure level of demand for rented property. In certain markets, today's renters are contributing more percentage of income to rent than in the past 20 years. As such, tenants continue to look for safe, long-term rented houses in popular areas like London, the East Midlands, and the West Midlands.

This trend offers a lucrative opportunity for buy-to-let investors who can procure properties in those areas that experience perpetual rental demand. In light of the persistent increase in rents, the UK property market is generating massive returns for investors who can take advantage of the increased demand for rental housing.

A Bright Future for the UK Property Market

In spite of the difficulties that face tenants with increased rental prices, the UK housing market is a robust and compelling investment prospect. The consistent demand for home ownership—along with renting—along with the deficit in housing stock, continues to be the driving force behind growth in main areas of the nation.

For property investors, this is a time of hope. As rents and house prices surge, high returns on investment are even more strongly sought after, and so the UK is a highly desirable property market to invest in the long term.

In a Magnate Assets Opinion:

As we continue to witness the rise in house prices, it is evident that the UK housing market remains one of the strongest and most rewarding markets for investors. With increasing rents and consistent demand for well-qualified rental properties, the outlook is good. At Magnate Assets, we believe in assisting our clients through the changing market and acquiring investment prospects that generate high rental yields and long-term growth.

We believe that, even with the economic restraint, the UK property market is still one of the best places to invest for both local and international property investors. From purchasing top-of-the-range property in London to identifying emerging prospects in areas such as the East Midlands, Magnate Assets can take you through the best investment options.