The UK is apparently in a “Cost of Renting Crisis” as costs increase whilst Renters (Reform) Bill slowly makes its way through Parliament.
This month’s HomeLet Rental Index indicates that UK rents have risen by +1.6% in one month, the fourth consecutive increase. Experts warn that these trends are symptomatic of the UK’s rental crisis, which shows no sign of abating.
In London alone, rents have soared by the equivalent of £65pcm (+3.1%) compared to March and the national increase works out at £21pcm extra being paid out by the average UK tenant. All but the East Midlands suffered a blow this month, with price hikes ranging between +0.4% in the South West, up to +2.9% in the North East and as much as +3.1% in London.
The increases mean UK renters can now expect to pay a third of their wages (33.3%) in rent, with Londoners paying out nearly two-fifths of theirs (39.1%). Despite the Bank of England predicting a drop in inflation, the data is showing that, for renters at least, the situation looks set to worsen. Across the country, rent has increased by +7.9% in the last year alone, and by +35.8% since pre-pandemic rates (January 2020, when the average monthly rent was £953pcm).
HomeLet and Let Alliance CEO, Andy Halstead, said: “A trajectory like this could see rental prices increase by almost 20% over the next 12 months, which would be the equivalent of over £250 more being paid out each month by the average UK tenant. This puts the country in a clear ‘cost of renting crisis’ and the Government must act to provide landlords and tenants with the clarity they so desperately need.”
The news comes after the Renters (Reform) Bill recently passed a long-awaited third reading in the House of Commons before moving on to the House of Lords for consideration. With landlords and tenants eager for clarity over the Bill’s key pledge to scrap so-called “no fault” evictions (Section 21 notices), its slow progress through Parliament only serves to prolong the current chaos within the private rented sector, according to Mr Halstead.
“Over the course of the last five years, since the scrapping of Section 21 notices was first mooted by the Government, the PRS has become increasingly more chaotic. While this is just one issue among many that fuels the chaos, ministers need to understand that uncertainty and delays to important legislation like the Renters (Reform) Bill create uncertainty. That leads to landlord churn and market volatility.
“Figures from HMRC show 139,000 taxpayers reporting 151,000 disposals of residential property in the 2022/23 tax year, amassing a total liability of £1.8 billion. This is much larger than two years previously.
“This has reduced the available rental stock and driven up rents as more renters compete for fewer rental properties. Until a clear date for the abolition of Section 21 notices is confirmed, many more landlords are likely to lose patience and sell up altogether. This will only inflate rental prices further – a situation the country can scarcely afford.”
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