Households cost rise highlights higher rate of inflation for renters compared to homeowners

The latest data from the ONS on households’ costs highlights the higher rate of inflation that renters are experiencing compared to homeowners.

Mortgagors and outright owner occupiers each had the lowest annual inflation rate of all tenure types, of 3.6% in the year to March 2026 with mortgagors experiencing a slight decrease from 3.7%; both household types saw a decrease in the annual inflation rate since December 2025, from 3.8% and 3.9%, respectively.

Overall UK household costs, as measured by the Household Costs Index (HCI), rose by 3.6% in the year to March 2026; this is the same inflation rate seen in December 2025.

Non-retired households experienced a higher annual rate of inflation (3.7%) in March 2026 than retired households (3.6%); non-retired households remained the same, while retired households saw a slight increase, from 3.5%, compared with December 2025.

Households with children and without children saw annual inflation rates of 3.5% and 3.7%, respectively, in the year to March 2026, compared with 3.6% for both groups in December 2025.

Damien Burke, Head of Regulatory Practice at Broadstone, said “Today’s figures underline the inflation realities facing UK households, with renters continuing to experience higher cost pressures than homeowners. Housing costs remain a major driver, particularly for private renters, where rising rents are continuing to absorb a larger share of disposable income.

“While headline inflation has moderated from recent peaks, many renters are still contending with elevated living costs alongside affordability pressures and limited capacity to build savings. This creates a wider financial challenge, especially with concerns growing around renewed energy price pressures and the cost of living later this year amid heightened geopolitical tensions.

“The findings demonstrate the strong case for policymaking and regulation that supports more renters into homeownership to build equity and long-term financial resilience alongside greater certainty and lower outgoings. It also supports the idea that maybe more harm is done by preventing private renters transitioning into first-time buyers when they can afford it compared to some first-time buyers who end up unable to afford their mortgage in the early months of ownership.

“The FCA’s mortgage market review suggests that the direction of travel is beginning to move towards affordability assessments that better reflect real borrower behaviour and lifetime income patterns. This can support this objective of helping more first-time buyers with their initial steps onto the property ladder by creating greater lending flexibility via a more nuanced shape of affordability.”