The cost of living picture in April 2026 is sharply divided between those who own their homes and those who rent, as falling energy bills provide relief for the majority while private sector rents hit a new national record.
Energy Bills Fall
The Ofgem energy price cap reduction that took effect on 1 April 2026 cut the typical annual energy bill by £111 — approximately 6.4% — from £1,738 to £1,627 for the average household. The fall reflects lower wholesale gas prices and is the third consecutive quarterly reduction since the peak of the energy crisis in Q4 2022.
Households on fixed tariffs signed before the cap reduction may be paying more than those on standard variable tariffs for the first time — making the autumn the moment to review tariff options.
Rents Hit Record High
Average private sector rents reached a new national record of £1,327 per month in March 2026 — up 7.8% on the year — according to Hamptons. In London, average rents now stand at £2,389 per month. In the South East, the typical rent has risen above £1,500 for the first time.
The supply of rental properties available has fallen 18% over the past two years as landlords exit the sector in response to higher mortgage costs and the regulatory changes introduced by the Renters Rights Act. Fewer properties chasing more tenants is driving prices higher in a market where demand is structurally inelastic.
The Divergence
The split between the experience of owners and renters is not new, but it is deepening. For those with mortgages on fixed rates secured before 2022, housing costs are low relative to income and falling energy bills are providing meaningful relief. For private renters, the cost of living crisis has not ended — it has simply changed its character, from energy and food to rent.
