UK

As of late 2025, the UK housing market is defined by slowing but steady price growth, with average prices up 2.8% year-on-year and the national average house price at approximately €312,000 (using an exchange rate of £1 = €1.16). Rents have surged to record highs: the average monthly rent in England is about €1,550, with London peaking at €1,740, while the North East remains the most affordable at €638 per month. Median prices per square metre to rent or buy are not consistently reported nationally, but London’s prime locations can exceed €10,000 per sqm to buy and €50–€70 per sqm per month to rent—outside the capital, both figures are significantly lower. Over a third of UK households now rent, and homeownership rates have dipped slightly but remain above 60%. Manchester has the highest private rental share (62%), while London leads in absolute numbers with nearly 1.8 million rental homes.

Publicly owned housing, known as social or council housing, accounts for about 14% of UK homes, providing long-term, low-cost tenancies managed by local authorities and housing associations. Social housing is not identical to public housing: "public housing" strictly refers to council-owned properties, while "social housing" includes both council and housing association homes, though both terms are often used interchangeably. The sector prioritises vulnerable and low-income groups, but decades of right-to-buy sales and underbuilding have created a severe shortage, lengthening waiting lists and increasing reliance on the private rental sector.

The UK faces a severe housing crisis, marked by a persistent shortage of affordable homes and disproportionately high costs of both renting and homeownership. There are an estimated 4.3 million more homes needed to meet demand, yet recent years have seen annual completions of only around 200,000 new homes. The crisis is most acute in prosperous city regions such as London and Manchester, where economic opportunities attract more residents but supply fails to match demand.

Rising rents, high house prices, and increasing living costs have pushed many households—especially those on low and middle incomes—into housing insecurity. Over a third of UK households are now renters, with young adults waiting longer to become first-time buyers and many families spending over 30% of their income on accommodation. Overcrowding and poor-quality housing disproportionately affect Black, Asian, and other minority ethnic groups, who are more likely to be renters and less likely to own homes. Households facing housing insecurity span across age groups, but difficulties are pronounced among low-income families, single-person households, ethnic minorities, and young adults living in ‘concealed’ households with their parents.

Homelessness, including rough sleeping and ‘sofa surfing’, has reached record levels, with hundreds of thousands seeking support from local authorities in 2025. The overall result is a growing divide: some benefit from home equity and housing security, while a significant minority struggle with high costs, instability, and limited prospects for improvement.

The UK national government is tackling affordable and sustainable housing through a mix of ambitious targets, major investment, and significant planning reforms. The core commitment is to deliver 1.5 million new homes by the end of 2025, with an emphasis on making new developments faster to approve, sustainable, and meeting local needs. Local authorities are now required to align housing plans with national targets, and a “strengthened presumption” clause lets central government intervene if councils fall short.

A key new initiative is the £39 billion Social and Affordable Homes Programme launching in 2026, aimed at delivering around 300,000 new social and affordable homes over a decade, with at least 60% reserved for social rent. This program prioritizes the most affordable housing types and gives flexibility for regions and providers to tailor supply to local needs. The initiative includes boosting grant funding, supporting council housebuilding, and fostering partnerships with housing associations and private developers.

Other measures include the Planning and Infrastructure Bill, which streamlines approvals, and the Decent Homes Standard, to improve housing quality and sustainability in both private and social rented sectors. The government is also incentivizing innovation and environmental standards through partnerships like HABIKO and funding for greener homes, while actively supporting small and medium-sized builders. Recent enforcement actions have secured an additional €116 million for affordable housing investment from major developers.

Housing cooperatives in the UK play a small but distinctive role, offering resident-controlled, community-oriented alternatives to mainstream housing that emphasize affordability, democratic management, and local empowerment. The dimension of the sector remains limited: in London there are an estimated 300 active housing cooperatives, but FCA data suggests a total of around 628 housing-related mutuals, although not all are genuine cooperatives. Across the UK, cooperative housing is estimated to account for well under 1% of total housing stock, with no authoritative national register or precise figures available.

Development in the sector has seen slow but steady growth in recent years, particularly in larger cities; however, the pace is hampered by restricted access to land, initial funding barriers, prolonged planning processes, and limited support infrastructure. There is a growing recognition among policymakers that the cooperative housing sector can help address housing shortages and social inequalities, leading to calls for renewed funding and streamlined processes.

In London, targeted actions include recommendations to renew and increase the Community Housing Fund, identify and release more public land for cooperatives, and strengthen support through local policy instruments such as the Small Sites Small Builders programme. At the national level, there is indirect support for cooperatives within broader affordable housing schemes, but no major dedicated national programme specifically advancing cooperative housing. The main policy emphasis remains on expanding community-led and affordable housing, with ongoing reviews to potentially widen support and remove administrative barriers.