House prices in England are now 7.6 times the median average salary, down from 7.7 times in 2024, according to the latest Office for National Statistics data released yesterday. In Wales, the ratio stands at 6.0 times median earnings of £35,800, while both nations have seen gradual improvement since the post-pandemic peak of 9.1 times in 2020-21.
The ONS Housing Affordability in England and Wales: 2025 report shows median house prices in England now sit at around £299,000 against median earnings of £39,300. However, industry figures warn that improving affordability ratios mask continuing pressure in the housing market.
Landlords exit despite improving ratios
Vann Vogstad, chief executive of COHO, a shared living platform supporting 6,000 HMOs and 55,000 tenants, said improving affordability does not automatically mean housing pressure is easing. “In many cases, the opposite dynamic can occur,” he said. “Homeownership is still out of reach for many, pushing up rents as more landlords look to exit the market.”
Vogstad pointed to regulatory pressure as a key driver of landlord exits. “For many, especially smaller landlords, the complexity and risk associated with regulatory reforms such as the Renters’ Rights Act can push them to sell,” he said. “We recently spoke to more than 10 of our landlords. Government tax and legislative changes means 70 percent will be forced to raise rent prices this year, and a quarter will have to spend between £100,000 and £300,000 over the next five years to meet the minimum EPC Band C standard by 2030.”
This follows Landlord Knowledge’s March report on sector contraction, which found the private rental sector has shrunk by £48 billion as landlords sell up. The latest figures suggest the trend is accelerating rather than stabilising.
Market stabilising but not recovering
Mary-Lou Press, president of NAEA Propertymark, said the data reflects a market that is stabilising rather than fully recovering. “Affordability remains stretched by historic standards, particularly for first-time buyers, and significant regional disparities continue to shape access to home ownership,” she said.
Press highlighted external risks that could undermine progress. “Wider global economic uncertainty and geopolitical unrest also have the potential to influence inflation, interest rates and supply chains, which could impact future housing affordability and market stability,” she said. “Ultimately, without a sustained increase in housing supply and continued support for buyers, affordability challenges will remain a key issue across both the sales and rental markets.”
Ryan Etchells, chief commercial officer at Together, agreed the wider picture remains challenging. “House prices remain elevated, especially in the capital where they are more than ten times the average wage,” he said. “Despite reforms to the planning system and public investment in construction, housebuilding is going backwards, with private housebuilding across Britain falling by 6.3 percent in the three months to January 2026.”
Professional operators fill gap
As smaller landlords exit the market ahead of the RRA, professional operators are expanding. Vogstad said the sector is seeing a gradual professionalisation as larger operators take over from individual landlords. “We are seeing more professional operators expand as they tend to have the systems, compliance processes and scale to manage the increasing regulatory requirements,” he said.
Nick Statman, chief executive of Bettermove, said some landlords are exploring flexible sale routes to exit more quickly. “Instead of improved affordability encouraging more experienced investors to re-enter the market, we are seeing signs that some smaller landlords are reassessing their portfolios against new regulatory requirements,” he said. “We are also seeing more landlords exploring flexible sale routes to exit the market quicker, particularly where properties are tenanted or where a traditional sale may take longer.”
Around 5.4 million UK households now rent privately, a figure that has surged by 28 percent over the past decade. With landlords continuing to sell and new supply constrained, rents are likely to remain under upward pressure despite improving house price affordability.
What this means for landlords
- If you’re a smaller landlord: Weigh compliance costs against returns – EPC upgrades alone could cost £100,000 to £300,000 for some portfolios by 2030.
- Watch for: Regional variations in affordability – London remains at over 10 times average wages while northern areas offer better value.
- Bottom line: Improved affordability ratios are not translating into a healthier rental market – landlord exits continue to reduce supply and push up rents.
Editor’s view
The headline improvement in affordability masks a more troubling trend for the rental sector. Every landlord who exits takes a home out of the private rental market, and there is no guarantee it returns. For tenants already struggling with rents that exceed average mortgage payments, fewer rental options is the last thing they need.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 27 March 2026
Sources: Office for National Statistics, COHO, Propertymark, Together, Bettermove
Related reading: Private rental sector shrinks £48bn as landlords exit market
