The downbeat results of a survey by a finance company suggest that half of tenants are worried that they will be unable to afford their rent next year.
The study involved 2,000 UK adults – all tenants or landlords – and revealed that 58% of tenants have seen their rent increased in 2022 and 49% are worried that they will not be able to pay rent in 2023.
Some 48% of landlords have had to increase rents due to rising interest rates and higher mortgage repayments but 56% would allow flexibility on rental payments in the midst of the cost-of-living crisis. Unsurprisingly, perhaps 77% of tenants say that more needs to be done to control rental prices in the UK
Paresh Raja – chief executive of MFS, which commissioned the survey – says: “It’s been a frenetic, challenging year, in which the base rate has risen by 2.9% and inflation has hit 11.1%.
“Our new research shows that this economic turbulence has forced landlords to hike rents, and millions of people are worried if they will be able to afford rent next year. These are stark findings. However, our research also shows that the majority of landlords are sympathetic about the cost-of-living crisis; many have chosen to freeze rents, while most are willing to be flexible when it comes to payments.
“It seems clear that honest, frank conversations are needed to ensure renters are not subsumed by rising prices and landlords can afford to repay debt. Inflation and interest rates hurt different people in different ways – and while 2023 offers hope that both pressures will ease, we must ensure there is support for those who are struggling financially in the current climate.”
Petition Calls on Sunak to Freeze Private Rents This Winter
Activist group Generation Rent has started a petition calling on Prime Minister Rishi Sunak to freeze private rents this winter.
As part of what it calls “an emergency package of support” for tenants, the petition makes an un-sourced claim that rents have risen by 12% nationally in 2022, although the most recent Office for National Statistics figure is much lower.
The petition is contained solely within the Generation Rent website so does not reveal the number of signatories, as is the case with transparent and independent petition sites.
You can see the full wording of the petition here:
Private renters are being hit the hardest by the cost of living crisis. Increasing market rents are encouraging landlords to force rents up on their current tenants – combined with the overall increase in the cost of living, private renters are facing a bleak winter.
That’s why private renters need an emergency package of support, alongside the longer-term measures under the Renters’ Reform Bill.
We’re calling on the government to introduce these protections:
1: Freeze Rents
Rents on new tenancies have risen by 12% nationally in 2022 and there is nothing stopping landlords from passing this on, regardless of whether their tenants can afford it. It is especially tough when the price of other essentials is rising at a similar rate. Freezing rents would allow renters to breathe and have a chance to continue to occupy their homes without getting into rent arrears. A rent freeze was recently enacted in Scotland – renters in England deserve the same.
2: Suspending Section 21 No Fault Evictions
To ensure that the rent freeze worked as successfully as possible, a suspension on no fault evictions is needed in order to stop landlords from simply evicting tenants in order to raise their rents regardless of any freeze.
3: Re-linking Local Housing Allowance to actual rents
For people who rely on Universal Credit or Housing Benefit, the cash available to pay rent (Local Housing Allowance) is frozen at 2019-20 levels, meaning that if their rent has risen they have to dip into the rest of their benefits to avoid getting into arrears.
Re-linking LHA to rents would ensure that the people least able to weather the economic storm are better protected. It puts them in a better position to pay for their rent while keeping warm and putting food on the table.
By enacting all of these measures, the government would protect the 11 million private renters who desperately need reassurance and support during this difficult time. Not only will this keep renters in their homes, but also strengthen the wider economy by easing the burden on local authorities and keeping people closer to their places of work.
Lettings Market “Does Not Bode Well for Low Income Tenants”
Trends in the lettings market “do not bode well for renters on low incomes” according to an analyst.
Jack Godby of lettings platform Ocasa says: “Tenants are facing a very tough time at present, as not only is the cost-of-living crisis stretching their finances, but high demand for rental properties is also pushing the cost of renting ever higher.
“As such, tenants with tight incomes are losing out to those whose pockets are deeper but still not deep enough to entertain the idea of buying in today’s frantic sales market.
“It doesn’t bode well for renters on low incomes. A cost-of-living crisis, inflation rises, and recently announced tax increases mean real income is set to shrink.
“It used to be that home ownership was the driving aspiration that we looked towards. Today, however, we’re getting dangerously close to a point where, for many people, simply renting a good home is a very tough task in itself.”
His comments come as his platform reveals that in Britain’s fastest-moving rental markets, up to 30% of homes are snapped up by eager tenants within two weeks of being listed.
Across Britain on average, 17% of rental homes entering the market are being snapped up by tenants within two weeks of being listed – but some areas have a much more pronounced trend.
The East of England is home to the fastest moving regional market with 24% of rental homes being grabbed within a fortnight; in London it’s 20% and in the southwest it’s 19%.
On a city level, the fastest-moving rental market is found in Bradford, West Yorkshire, where 30% of properties are snapped up within two weeks of listing.
In Glasgow it’s 26%, in London it’s 20%, and in Bristol 17%.
Private Rents in Britain Hit Record Highs
Average private rents in Britain have soared to record highs, with severe shortages of properties resulting in more tenants paying above the asking price and stretched budgets, forcing more people to downsize to studio flats, data shows.
The average advertised rent in Greater London is 16.1% higher than a year ago, which is the highest growth rate of any region on record, according to the property website Rightmove.
However, the site also revealed that some cities and towns had faced even bigger annual rents, piling yet more pressure on households already facing severe strain.
In Newbury in Berkshire, advertised rents have jumped by 22.2% over the past year, while in Manchester, the annual increase was 20.5%. In Cardiff, it was 19.6%, in Edinburgh, 18%, and in Birmingham, the figure was 17.6%.
The rise in housing costs has been blamed largely on demand for rental properties, greatly outstripping supply, and leading to intense competition among tenants.
Rightmove warned that the soaring cost of new mortgages triggered by September’s botched mini-budget could worsen the situation, as some would-be first-time buyers who could no longer afford the property they wanted or were keen to wait for it calmer conditions before proceeding may decide to stay renting for longer.
Separate research by iPlace Global, a property technology company, found that 16% of landlords were aiming to sell their buy-to-let property because of rising costs, which could further reduce the supply of rental homes.
Rightmove said the typical advertised private rent outside London had risen to a new record of £1,162 per calendar month, while the equivalent figure in the capital was double that at £2,343.
“There are simply not enough homes available to rent to meet the demand from people inquiring,” said Tim Bannister, the site’s director of property science.
Tenant demand was up by 20% compared with last year, while the total number of available properties to rent was down by 9%.
Studio flats have overtaken one-bedroom properties as the most in-demand flat type for renters, with agents suggesting that a combination of stretched finances and the returning popularity of city centre living were contributing to this shift.