Rent Inflation Soars to 3.6% – Contractors Urged to Act Now

Contractors and renters, rent inflation is rising — and fast. With private rental prices surging and essential costs climbing across the board, understanding the impact on your living expenses is more critical than ever.

New data from the Office for National Statistics shows UK private renters experienced a 3.6% inflation rate in the year to March 2025 — the highest across all housing tenures. Behind this sharp rise are ballooning private rental payments, which climbed 7.4% over the year to reach an average of £1,335 per month in May. Social and other renter households followed, with a 3% rise in the cost of living. Meanwhile, owner-occupiers — especially those without mortgages — saw far less pressure, with inflation rates as low as 1.8%. Those with mortgages faced a 2.8% increase, cushioned slightly by the slowing pace of interest rate hikes.

For contractors, especially those renting privately, these figures are a call to act. The rising cost of living — particularly rent — disproportionately affects those on variable income or fixed-term contracts. With rents climbing faster than wages in many sectors, reviewing your housing budget or renegotiating lease terms could be a crucial financial step. Personal finance expert Sarah Coles notes that while inflation dipped slightly in early 2025, “life is only going to get tougher” — particularly for low earners and renters. On the other hand, inflation has cooled for higher earners and mortgage holders, hinting at a possible divergence in financial pressures across income groups. ARLA Propertymark also weighed in, urging government support to reduce costs for landlords, which in turn could ease rent prices. Their president, Angharad Trueman, said: “It’s more vital than ever for policymakers to re-examine taxation on the rental sector to support long-term investment and bring down costs.