Global Housing Pressure Mounts

A severe rental crisis in Great Britain is seeing tenants allocate a record 44% of their average wage to rent, a situation mirrored by growing housing affordability challenges in Kenya. According to data released on Monday, 27 October 2025, by UK property portal Rightmove, the average advertised private rent for properties outside London surged to a new high of £1,385 (approximately KSh 246,000) per month in the third quarter of 2025. In the capital, London, the average monthly rent also hit a record £2,376 (approximately KSh 422,000). This figure represents a significant increase from five years ago when rent consumed 40% of the average wage, highlighting a rapidly deteriorating affordability landscape for British tenants.

Drivers of the UK Rental Surge

The surge in UK rental prices is attributed to a combination of factors creating a perfect storm for tenants. A chronic undersupply of rental properties is the primary driver, a situation exacerbated by landlords exiting the market. According to market analysts, tenant demand outpaced supply by nearly 20% in 2025. Many landlords cite rising operational costs, particularly higher mortgage interest rates, as a key reason for either increasing rents or selling their properties. The Bank of England's efforts to curb inflation have led to increased mortgage costs for landlords, who are subsequently passing these expenses on to tenants.

Legislative uncertainty has also played a significant role. The UK government's Renters' Rights Bill, which passed its final parliamentary stages on Wednesday, 22 October 2025, and now awaits Royal Assent to become law, is intended to provide more security for tenants. Key provisions include the abolition of Section 21 'no-fault' evictions, which have been a leading cause of homelessness. However, landlord groups have expressed concern that the increased regulation and removal of flexibility might prompt more property owners to leave the sector, further constraining supply.

The Kenyan Context: A Parallel Struggle

While the UK grapples with its rental crisis, Kenya faces its own significant housing challenges, driven by rapid urbanization and a persistent gap between supply and demand. According to the Kenya National Housing Corporation, the country has an annual housing deficit of 200,000 units, with the market supplying only 50,000 new units each year. This chronic undersupply puts consistent upward pressure on both rental and purchase prices, particularly in urban centres like Nairobi.

Like in the UK, interest rates have a profound impact on the Kenyan housing market. Research indicates that high lending rates significantly slow down housing construction by increasing borrowing costs for developers, thereby limiting new supply. For tenants and aspiring homeowners, high mortgage rates make homeownership an unattainable dream for many, increasing demand in the rental sector.

While precise, recent national statistics on the average percentage of income spent on rent are pending the results of the 2025/26 Kenya Integrated Household Budget Survey (KIHBS) currently being conducted by the Kenya National Bureau of Statistics (KNBS), the pressure on household budgets is evident. Data on apartment prices in Nairobi for 2025 shows significant costs, with one-bedroom units in areas like Kilimani and Westlands selling for between KSh 6 million and KSh 9.5 million. These high capital costs invariably translate to high rental prices for tenants in the same areas.

Policy Responses: A Tale of Two Approaches

The policy responses in the two nations offer a study in contrasts. The UK is focusing on rebalancing the rights between landlords and tenants through legislative reform like the Renters' Rights Bill. In contrast, the Kenyan government is tackling the supply-side issue head-on through its ambitious Affordable Housing Programme. The programme, a key pillar of President William Ruto's agenda, aims to deliver 200,000 housing units annually. As of early 2025, officials reported that 140,000 units had been constructed.

In a bid to make homeownership more accessible, the Kenyan Cabinet in June 2025 approved regulations that, among other things, reduced the deposit requirement for affordable homes from 10% to 5%. Further amendments were approved by the National Assembly in August 2025 to streamline the allocation process and expand the programme to include rural housing. This focus on ownership is designed to alleviate long-term pressure on the rental market by creating a new class of homeowners. However, the success of this ambitious plan hinges on sustained government funding, private sector participation, and the stabilization of borrowing costs for both developers and buyers. For now, tenants in both Nairobi and London are left navigating a challenging market where the cost of keeping a roof over their heads continues to rise.