The Labour government has promised to abolish no-fault evictions, which allow landlords to evict tenants without giving a reason, through its Renters’ Rights Bill after the Conservatives’ Renters Reform Bill failed.
Labour has promised the bill will end bidding wars between tenants as well as giving renters stronger rights to keep pets and avoid discrimination if they have children or are in receipt of benefits.
Twomey added: “We won’t fix the cost of renting crisis unless the government uses its upcoming Renters’ Rights Bill to slam the brakes on the runaway cost of rent. We need more homes to be built in the places people want to live, but to protect us in our homes, we also need to be shielded from unaffordable rent rises. That means stopping landlords raising rent above either wage growth or inflation, whichever is lower.”
The devolved countries in the UK have engaged with the issue of rising rents more directly than Westminster in recent years. The Scottish government limited rent increases and banned evictions between September 2022 and April 2024 and are planning long-term rent controls. The Welsh government is currently consulting on the idea of bringing in rent controls.
How much is rent in UK?
Around 4.6 million households use the private rented sector in England with 11 million renters.
The private rented sector is now the second biggest tenure of housing in England behind owner occupiers, making around a fifth of all households in the country.
The most recent ONS statistics show average rents increased to £1,319 a month in England, £748 in Wales and £965 in Scotland in the year up to July 2024.
Renters in London are seeing the biggest increases in the UK with rents 9.7% higher than in 2023 – albeit down from an 11.2% rise in March 2024 – at an average price of £2,114.
Around 1.2 million private rented households have reported finding it difficult to pay rent, according to the English Housing Survey.
The Westminster government unfroze local housing allowance in April 2024 but tenants on low incomes are still facing a challenge to keep up.
A recent Financial Conduct Authority survey found over two-fifths of renters (42%) said their disposable income had gone down a lot over the last 12 months in England or that they had no disposable income whatsoever, compared to the UK average of 28%.
Households have faced rising bills and food costs in recent years as part of the cost of living crisis and there is no respite when it comes to housing costs.
But there has been little action on the issues driving rising rents, namely high demand for properties and a lack of supply.
It’s not just the private rental sector that has seen rent rises, tenants in social housing saw their rents increase by 7.7% as of April 2024. The rate at which housing associations can increase or decrease rent is set annually at 1% higher than the current CPI inflation rate.
The settlement is set to stay in place until at least April 2026.
Why is UK rent so high?
The short answer to why rent is so high is because there is a shortage of affordable housing.
There is a housing crisis in the UK because not enough homes have been built by successive governments in the last few decades at a time where social housing stock has been sold off to the private sector through Right to Buy or demolished and not replaced.
An estimate from the National Housing Federation found around 340,000 new homes should be supplied in England each year with 145,000 them to be affordable.
The Conservative government has previously targeted 300,000 new homes in England – a 2019 manifesto commitment – but is yet to hit that mark. In 2023-24, 235,000 new homes were supplied, but the signs ahead suggest annual delivery could fall.
Despite this, Labour has committed to building 1.5 million homes by 2029 with targets to build 370,000 homes annually.
Meanwhile, areas like Cornwall where tourism has seen a surge in short-term lets through the rise of Airbnb in recent years faces even more pressures on demand.
The private rental sector has picked up the slack in recent years and has doubled in size over the last two decades.
The stiff competition has seen rents on the market increase but many landlords have kept pace by putting up rents for existing tenants.
While generally speaking there is a shortage of private rental properties across the UK, the difference between supply and demand changes from region to region.
The Office for National Statistics collects data of rental prices from properties in England then revisits every 12 months to assess changes in price.
The statistics body found the highest average price increase for properties visited in September 2023 was in the north-west of England, where prices rose 12.3%.
Will rent prices go down in 2024?
Rising rents are having an impact – the latest Ministry of Justice (MoJ) figures show the number of tenants evicted by private landlords continuing to surge.
A total of 109,538 households have been threatened with a no-fault eviction in the five years since the Tories promised to scrap them. Labour has pledged to abolish them over the next few months through the Renters’ Rights Bill.
A total of 2,228 evictions recorded between April and June 2024 represented a 9% year-on-year increase.
Rents on new properties are starting to hit the highest point of what tenants can afford, which is seeing rises start to slow. But it is a long way from rents starting to fall.
There is reason to think rents could yet rise further.
A landlord exodus could see rents rise despite cost-of-living pressures, particularly as some first-time buyers may no longer be able to afford to stop renting as rising interest rates mean a mortgage is unaffordable.
But the Resolution Foundation is forecasting a different reason for rents to rise and disputes the suggestion of landlords leaving the private rented sector.
The think tank said the surge in rent prices for new tenancies seen in recent times is set to filter into existing rents and could see payments rise by 13% over the next three years.
That is set to outstrip the 7.5% increase in wages forecasted by the Office for Budget Responsibility over the same period.
“With more families renting privately, and renting for longer too, these rent surges are a bigger problem for Britain, and require bolder solutions from policy makers,” said Resolution Foundation’s Cara Pacitti. “Short-term solutions include regular uprating of local housing allowance to support poorer families, and the ultimate longer-term solution is to simply build more homes.”
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