Renters are working for 125 days a year to pay their landlords, says think tank

Cost of Rent Day, May 6, is the day on which renters in England stop paying rent and start putting their earnings into their own pocket. This year, the ASI has estimated that every penny that, on average, renters earned before tax for working before and including May 5th went to their landlord - from May 6th they are finally earning for themselves. 

The Adam Smith Institute has created this measure in order to translate the severity of the housing and rental crisis into simple terms that can be easily understood by all audiences. It provides a useful measure to hold politicians to account and track changes over time. 

To calculate the Cost of Rent Day, the proportion of income of private renting households equivalent to private rent was translated into a proportion of days of the year, which provides the final cost of rent day figure. Cost of Rent Days were calculated for 10 regions across England and Wales, and for each Local Authority in London.

As the ASI outlines, the root problem is the lack of supply. Since the 70s, England's construction of new homes has lagged behind population growth. In other words, new demand has outstripped supply. 

Directly punishing all landlords or introducing policies such as rent controls will only make the situation worse for renters. Instead, politicians must focus on creating the right incentives for developers and landlords, and on increasing supply.

The ASI has previously outlined a number of solutions, which it calls on the government to consider. These include using compulsory purchase orders to buy, and develop on metropolitan green belt land, and give local residents a share of the profit, releasing all green belt land within a ten minute's walk of a railway station for development, and extending ‘full expensing' to brownfield sites.

James Lawson, Chairman of the Adam Smith Institute, said:

“Renting in England has become eye-wateringly expensive. Our latest analysis exposes the severity of this crisis, particularly in our cities, London and the South East.

This should not come as a surprise. Our housing market is by no means free - it's shackled by regulations that empower NIMBYs at the expense of future homeowners. 

Many of the policies which are being widely touted as solutions, including rent controls, will only make things worse. Instead of engaging in more central planning and regulation, we must liberalise our planning system. A growing housing supply is the only sustainable way to cut renting costs.

Cost of Rent Day is another damning indictment of Britain's sclerotic economy. The UK has so much potential but, until we fix our broken planning regime, we cannot hope to reverse our ongoing decline.”

Sir Brandon Lewis, former Minister of State for Housing and Planning, said:

“Cost of Rent Day hammers home the crippling burden faced by renters across the country. With housing costs consuming so much of their income, renters are struggling to get by -  let alone plan for the future. Cutting the cost of renting is essential to addressing the deep-rooted challenges facing our country.

Sky-high rents are the result of a bureaucratic planning system that stifles supply and drives up prices. For decades, overregulation has meant housebuilding has lagged behind population growth, with renters paying the price.

While the scale of the challenge should not be understated, the solution is simple - we need to get Britain building. More homes mean lower rents, spurring economic growth and productivity. Through serious planning reform, we can deliver a better deal for renters  - and a more prosperous Britain as a result.”

James McMurdock, Reform MP for South Basildon and East Thurrock, said:

“Last Thursday's election results made one thing clear: the public have had enough of the status quo. On the doorstep, one of the top concerns was mass low skilled immigration and the real world impact it's having on wages, housing, and the prospects of young people. Government inaction has only made matters worse.

This Cost of Rent Day highlights a growing crisis. For many hardworking young Brits, the dream of home ownership, or even starting a family, is drifting out of reach.

We must act. That means building more homes, especially on brownfield land in our cities where demand is highest. Every young Brit should be able to aspire to what their parents and grandparents once took for granted: a decent home, a stable life, and a future worth investing in.”

Jack Rankin, Conservative MP for Windsor, said:

The ASI's Cost of Rent Day is a sobering reminder of Britain's broken housing market and a clear signal that our planning system is in urgent need of reform. Until we build more homes and drastically reduce immigration, tenants will continue to shoulder the burden of sky-high rents, holding them back from buying a home, starting a family and getting on in life.

Proposals for rent controls and further regulation will only make matters worse, shrinking the already limited supply of rental housing. The real issue isn't landlords - it's a bureaucratic planning system that stifles new development, particularly in our cities. 

Cost of Rent Day must serve as a wake-up call for politicians. If we're serious about securing a better deal for renters and unlocking growth, then we must get Britain building.

-ENDS-

METHODOLOGY:

• To calculate the Cost of Rent Day, the proportion of income of private renting households equivalent to private rent was translated into a proportion of days of the year, which provides the final cost of rent day figure. 

• To balance for leap years and support better inter-year comparisons, a year is treated as being 365.25 days long.

• Using otherwise unrounded inputs, this calculation implied 125 days of the year are spent on rent. The 126th day of the year is May 6th.

• This is a deliberately simple calculation and as outlined above and below, will not capture the nuances of individual circumstances. However, it enables a simple, transparent, and intuitive calculation - this is preferable to more complex alternatives we developed.

• Regional analysis is based on ONS data and segments England into: East, East Midlands, London, North East, North West, South East, South West, West Midlands, Yorkshire and The Humber, and Wales. 

• London Cost of Rent Day was segmented into each of the 32 Local Authorities. 

Further details can be found in the report. The report will be available on the ASI website from 10pm Monday 5th May. You can read it in advance here using the password: ASICOR2025!

Notes to editors:

James Lawson is Chairman of the Adam Smith Institute. He first developed and produced Cost of Rent Day as a way to explain the housing crisis and provide an independent non-partisan metric to hold politicians of all parties to account for its resolution.

Sam Bailey is a Research Associate who supported in refreshing the analysis for 2025.

The Adam Smith Institute is one of the world's leading think tanks. It is ranked first in the world among independent think tanks and as the best domestic and international economic policy think tank in the UK by the University of Pennsylvania. Independent, non-profit and non-partisan, the Institute is at the forefront of making the case for free markets and a free society, through education, research, publishing, and media outreach.

The report will be available on the ASI website from 10pm Monday 5th May. You can read it in advance here using the password: ASICOR2025!