All The Reasons Why Private Renting Right Now Really Is Chaos

The rental market in England is, to use a technical term, totally and utterly bonkers right now.

"There were literally around 60 other people viewing the property," a colleague in her early 30s told me recently of her search to find somewhere new to live in north London. "By the time I’d talked to my boyfriend about it because he couldn’t make the viewing, it had gone to someone else. The agents were also asking people to put sealed bids in on their way out."

This is the sort of thing you might expect in the home buying market: queues of people and homes going to the highest bidder.

So what on Earth is going on with renting?

There is currently a cost of living crisis in Britain. Though it sounds like an existential breakdown it is, in fact, centred around rising consumer inflation, which increased by 9.9% in the year to August 2022. That means the cost of essentials like energy and food is getting more expensive. 

There was a housing crisis long before inflation started going up and now the two social disasters are on a collision course because private rents are going up and up, too. 

In September 2022, asking rents for new lets went up in every single part of the UK, according to the HomeLet Rental Index. In Greater London there was a whopping 2.5% rise, which helped propel the average rent in the UK to £1,159 per calendar month. That was a 1.4% rise on August. 

Renters are also reporting being hit with 20%, 30% and – in one case I heard of recently – even 70% rent hikes within their tenancies as landlords ask for more every month. This means that some rent rises are spiralling way above inflation, which is currently higher than experts expected it to be and only set to soar further.

Some people simply can’t pay these rising rents and charities fear it could lead to a spike in homelessness. According to Shelter, the number of renters evicted by bailiffs has gone up by 39% across just the last three months. The charity is warning that the total number of eviction proceedings is now back at pre-pandemic levels, before the temporary pause on evictions that was put in place when coronavirus was at its height. 

Polly Neate, chief executive of Shelter, said: "Every day our emergency helpline supports people having to make impossible choices between putting food on the table or paying their rent. Housing costs are people’s biggest outgoing and those who have nothing left to cut back will soon be left with nowhere to call home."

So what’s causing all of this chaos?

Firstly, there is a shortage of housing available for private rent for two reasons: because some landlords sold up during the pandemic and because people are not moving as rents are going up and they don’t want to pay more elsewhere. This has created a rise in demand that has driven prices up (aka enabled landlords to ask for more) across the country, although London, as ever, remains the inner circle of Britain’s housing market hell.

Sadly, there is some money-grabbing going on. Experts such as Generation Rent, an organisation which campaigns for renters’ rights, fear that some landlords are passing on their own cost of living concerns to their tenants. 

Dan Wilson Craw works at Generation Rent. "When properties do come up, there's lots of people competing for them. So rents are zooming up and you've got landlords and letting agents using really horrible tactics to find the person who's willing to pay the most," he explains. 

"We’re hearing of them getting people in for mass viewings – putting pressure on them that way – and asking people to bid on rents and taking offers from people who are willing to pay several months' rent upfront." 

"These are all things that are ultimately pushing up rents."

The wider economic context is responsible too, but so is Britain’s new government. When inflation goes up it is the convention for central banks – like the Bank of England – to put interest rates up in an attempt to cool things down because this makes it more expensive for us to borrow money, encourages us to save (in theory) and, overall, means that people will tend to spend less. This will have made some landlords' mortgages more expensive, which could be feeding into rent rises.

However, this has been exacerbated by new prime minister Liz Truss and her chancellor, Kwasi Kwarteng, who delivered a so-called mini-budget which has sparked a chain of events (which you can read all about here) that have caused average mortgage rates to jump from around 4.75% to 6%. So some private landlords may well ask their tenants to absorb the shock moving forward.

None of this would be so bad if private renters were protected from eviction and rent hikes. Scotland’s government has decided to rush through emergency legislation to freeze rents and bring in a moratorium on evictions. Sadly, there are no current plans to do the same in England. As things stand, landlords can increase their tenants' rents and evict them at any time without having to give them a reason. 

All told, this is a perfect storm for anyone who doesn’t own their own home and, in particular, lower income women who rent.

The Office for National Statistics (ONS) says that rents have increased by 3.2% across the UK in the past year. That’s the fastest rate since after the global financial crisis of 2008.

However, as I mentioned above, the real rate of rent inflation is likely higher. The ONS data is what’s known as 'experimental' as there is no easy way of recording rent increases because there is no central database of how much private renters are paying. 

"For the past year or so, rents have been going up quite rapidly, more rapidly than we've seen in a long time," explains Wilson Craw. "The last big increase in rents was back in 2014/15 and this seems to be bigger than that." 

This hellscape is particularly difficult for women to navigate. There was already a gender housing gap back in 2019 before the pandemic caused rents to surge. Women still earn less than men on average and even before rents started spiking there was, according to the Women’s Budget Group, nowhere in the country where it was affordable for a woman on her own to rent or buy a home. The World Economic Forum has also warned that the rising cost of living will hit women the hardest.

Rising rents are particularly painful for people who rely on state support and pay their rent with housing benefit via universal credit. That’s because housing benefit is currently frozen at 2019/20 levels while rents have hit historic highs since then. We know that women are more likely to rely on state support so the shortfall between available state support and the cost of renting privately will most affect them. 

Things are so bad that charities are now describing the shortfall as a 'black hole'.

Recent research conducted by the homelessness charity Crisis in partnership with the property search site Zoopla found that only 12% of rental properties listed in the last year were affordable to those receiving housing benefit.

This is a very difficult time for a growing number of private renters. Is there any hope? 

Generation Rent is calling on the government to implement a rent freeze just as Scotland’s government has done. It's also calling for the government to honour its promise to ban unfair no-fault evictions to increase stability for private renters. 

Until that happens, if you are hit with a rent hike you don’t just have to accept it. You can negotiate and try to challenge it. There is more information about how to do this on the charity Shelter’s website.