A ‘cost of renting crisis’ is making life increasingly precarious for young people, and those from poorer backgrounds – here’s how we got here
By now, you’ve heard the horror stories. Landlords raising the rent by hundreds of pounds per month, pricing tenants out of their own homes, only to relist them for double the price online. Dozens of young people queuing up to view dingy flats, as others pay 12 months upfront just to secure a damp-riddled roof over their heads. Homeowners trotting out the old “avocados and Netflix” argument, as the young and poor lose an increasing percentage of their monthly income to the owners of their tiny one-bed flats (as if the cost-of-living crisis wasn’t bad enough in itself).
Basically, things are looking bleak. Admittedly, the UK rental market has been looking bleak for some time (a 2019 report revealed that there’s not a single region in England where private-rented housing is affordable for a median-earning woman, and things haven’t shown signs of improvement since then). But now, in 2022, experts are in agreement that the cost of renting is reaching a new crisis point, both inside and outside of UK cities.
In the 12 months leading up to July 2022, in fact, the Office for National Statistics (ONS) recorded the largest annual growth rate of private rental prices since its index began in 2016. Data from Zoopla, shared in 2021, painted an even worse picture: rents were rising at the fastest pace in 13 years, the property website suggested, and additional figures show that they saw another spike in early 2022 (up to almost 20 per cent in inner London).
Below, we break down how the cost of renting crisis, how we got where we are today, and what it means for renters trying to navigate the hellscape.
HOW DID THINGS GET THIS BAD?
Remember at the start of the pandemic, when young people appeared to be fleeing London in droves, in order to live in more affordable areas and work from home? Well, that didn’t last long, and prospective renters have since flooded back into the capital and other UK cities. As a result, “London’s rental market has seen continuous growth in tenant inquiries as well as in the number of tenants extending their rental agreements,” according to Richard Davies, managing director of Chestertons. “This has created an extremely competitive market for tenants where many offer landlords over asking price in order to secure a property.”
Of course, this wouldn’t be such a problem if not for the short-sighted policies of a government that neglects the interests of tenants in favour of private landlords, essentially giving them free rein to raise rents while providing the bare minimum in return.
“The other piece of the puzzle that’s brought us to where we are now is what’s been going on with house price inflation,” Tenants author Vicky Spratt told Dazed earlier this year. “What that has done is made it harder for people on low incomes or first-time buyers with small deposits to buy homes of their own. So, that, combined with the social housing shortage, has pushed more and more people into private renting.”
WHERE IS HIT HARDEST?
Unsurprisingly, the UK’s biggest cities have seen the sharpest increase in private rental costs. In London, the average advertised rent was 15.8 per cent higher in July than 12 months previously, according to Rightmove, against an average of 11.8 per cent outside the capital. In some areas such as Manchester, however, that average even jumped to as much as 20 per cent.
As a result of the increases, London has hit a new record average advertised rent of £2,257 (congrats!) and remains the most expensive place to rent in the UK. Nevertheless, the rises across the country are way beyond the rates usually considered reasonable, and significantly higher than wage rises over the same period.
@jessicageary1 the housing crisis has hit me #Manchester #Help #fypシ ♬ original sound - Jessica Geary
WHAT DOES THIS MEAN FOR RENTERS?
The most immediately obvious impact of the cost of renting crisis for renters – particularly those who are young or from low-income backgrounds – is the difficulty of finding a flat or house to rent in the first place, amid an imbalance of supply and demand. This desperate situation could also create an environment in which they’re taken advantage of, however, in their desperation to put a roof over their heads.
Then, there’s the even darker threat of widespread homelessness. Research conducted by Savills and shared by the cross-party group London Councils this month revealed that an estimated 125,000 low-income households are at heightened risk of homelessness in London alone, because their benefit entitlement now falls short of meeting their rent.
“Fewer than one in ten properties listed for private rent in the capital are affordable to Londoners who depend on welfare support for meeting their housing costs,” the research adds, and that’s before taking the spike in energy, fuel, and food prices into account.
“The combination of rising rents and the worsening cost-of-living crisis means many tens of thousands of Londoners are at real risk of homelessness in the coming months,” says Darren Rodwell, London Councils’ executive member for housing. “Without urgent action, we’re worried we’ll see growing numbers of low-income households unable to afford their rent and becoming homeless. The consequence for those Londoners could be devastating.”
Today we're warning that London faces a #homelessness spike in the coming months due to the cost-of-living crisis and increased private rents.— London Councils (@londoncouncils) August 26, 2022
We estimate 125,000 households in the capital are at heightened risk of homelessness. pic.twitter.com/Cs8wI2IsiK
WHAT IS BEING DONE ABOUT IT?
Campaigners, charities, and housing experts have urged the government to take drastic action in order to curb the crisis. Proposed measures include rent inflation caps (which have been proposed for social housing as the cost-of-living spikes, but not private rentals), an all-out ban on rent increases, and an end to Section 21, or “no-fault evictions”, which allow landlords to kick tenants out with little notice and replace them with people who will pay inflated rents.
On August 30, London mayor Sadiq Khan also called on the government to double the notice periods for private rental evictions to four months, to give tenants more room to manoeuver “as the cost of living crisis spirals and rents continue to increase in the capital”.
The outlook isn’t particularly hopeful, though. After all, it was first announced that the “no-fault” eviction law would be scrapped back in 2019, as part of the Conservative manifesto (that was the first bad sign, TBH). And yet, there is currently no date set for the change to become law.
This inaction is a particularly hard blow for renters who face a choice between paying their rent or putting food on the table, or leaving their career and community behind due to rising costs – they need action now, and can’t wait for the government to delay urgent legislation. And, with inflation predicted to rise as high as 18 per cent in the next year, to the highest rate in almost 50 years, the future looks even more dire. In the meantime, if you are having any problems, you can reach out to ACORN – the UK’s housing and community union – who can offer expert guidance.