UK Housing Gap Widens as Supply Retreats and Costs Climb

UBS Asset Management’s latest real estate analysis examines how macro shocks, demographic shifts and regulatory pressures have deepened the structural imbalance in the UK residential market 

• Rents continue to rise (London tenants spend ~40% of gross income on rent), while low-income wages lag housing costs, reinforcing rental dependency and affordability stress.

• Supply is contracting: 45,000 London rental homes exited the market (2021–23), new builds remain structurally subdued, and only 5% of listings are affordable to low-income households.

• Regulatory tightening and build-cost inflation (+142% since 2000) weigh on private investment, potentially opening space for institutional capital in affordable housing.

Can institutional investors close the supply gap where private landlords retreat? The full report assesses risks and opportunities.