The Rental Crisis
In the UK, a rental storm has been brewing for a while now. Coupled with the energy and cost of living crises, as well as crippling interest rates, landlords have had no choice but to increase their rents to compensate. However, some have been accused of unfairly benefitting from the rental crisis and cashing in on the situation. With renters paying out up to 85% of their income on rent, it’s no wonder that things are at breaking point.
Rightmove Rental Figures
Rightmove has released the latest figures that show the average rent in London has risen to £2,627 a month, which is an increase of 12.1% over the last year. Outside the capital, the average rent has gone up for the 15th quarter in a row, now sitting at £1,278 a month. This is still a 10% increment from this time last year.
Additionally, every property is now receiving around 25 enquiries, which is up from the high of 8 in 2019. Struggling with a balance act of supply and demand, more renters are trying to move despite more landlords having taken themselves out of the rental sector.
Renters in London, in particular, are feeling the squeeze in the capital and Greater London area. Young tenants and families are being forced out of London, which is then affecting jobs, schools and commerce. Winkworth even reported a 20% rise in relocations from London to Reading, Newbury and Northampton. With higher prices being set, more tenants have been forced out, or further out, from the city.
The wider rental market is failing the vulnerable. Capital Letters is a not-for-profit organisation that helps families living in temporary accommodation find homes paid for through the local council’s local housing allowance. In 2021, Rightmove and Zoopla advertised 13% of their properties as affordable under this allowance. Today, this is now 2.3%.
Foxtons has analysed the market and has noticed a 10% increase in supply from last September as well as a 13% dip in demand. This could point to early signs that demand is falling and supply is going up. The firm is expecting rents to level off by Christmas, but this is no assurance to anyone who has been evicted for not being able to pay rental increases.
What’s the Solution?
One of the main issues with housing is that there’s been a consistent lack of them being built year after year. Some councils have tried to offer a solution to the problem, such as Westminster City Council. Rental accommodation at a reduced price is being offered alongside a scheme that accelerates homeownership. With a 20% discount on rent over the course of three years, as well as help putting a deposit together for those with a household income less than £90,000, this could be of benefit to some.
Now that more people are moving out of London on account of unaffordable rent, more professionals are taking notice of this alongside the crisis of homeownership. This has given more power to tenants over no-fault evictions, although the Bill going through Parliament is unlikely to be passed this year.
Rental freezes have been spoken about in the past, especially with London rent potentially reaching £2,700 next year. However, though it’s small comfort to anyone displaced, the best long term solution is for more houses to be built across a mixture of tenures. More council houses and affordable homes are needed to free up stock in the rental market, which is a goal that goes beyond any single government.