Eye-watering rent increases across the UK are piling pressure on tenants already grappling with spiraling living costs, driving some from their homes and stoking fears that the market is overheating.
Rents are rising at their fastest pace since the financial crisis owing to a combination of increased demand, slower turnover of rental homes and opportunistic efforts by some landlords to pass higher costs on to tenants.
Average rents on new leases are up almost 10 per cent compared to a year ago, according to estate agent Hamptons International, and a growing number of renters are unable to keep up with payments and facing eviction. Tenant groups warn the market is overheating and that renters face homelessness as a result.
Eva, an Edinburgh university undergraduate student, managed to negotiate her 35 per cent rent increase down to 20 per cent, but will still be priced out of her home. “We have to move out in two weeks and we literally can’t get viewings [for other properties],” she said.
“With everything increasing it’s got to the point where I don’t eat as much as I used to, I am afraid to buy food because I am stressed,” she added. In big cities, the return of some of those who left during the pandemic alongside overseas students and business travellers has led to a spike in demand for rental properties.
Supply and demand have become increasingly mismatched in recent months. According to estate agent Foxtons, there are 40 per cent fewer homes available to rent in London than there were a year ago. According to its data, 28 renters were competing for every new property that hit the market last month.
Meanwhile, landlord groups say the stock of available properties is diminishing because higher taxes and rising interest rates are driving them from the market — though evidence for this is inconclusive.
Ben Beadle, chief executive of the National Residential Landlords Association, blamed higher taxes and other policies for making being a landlord less attractive and shrinking the pool of homes available.
“Rents will only continue to rise unless ministers change course and recognise the damage their policies are causing,” he said.
Official data on the size of the private rented sector is inconclusive. Figures published by the department for levelling-up, housing and communities suggest the number of homes owned by private landlords hit a record level in England last year, while data from the English Housing Survey indicates that the number of households in the private rented sector has actually fallen since 2016.
Neither shows an exodus of landlords, however, suggesting other factors are driving up rents. The stock of available homes is partly diminished because tenants are signing longer leases. According to Hamptons, half of all leases signed in 2012 were for two years or longer; today that has risen to around three-quarters, meaning properties become available less frequently.
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