Rental crisis deepens as prices surge to record highs across UK

Renters across the UK continue to face an affordability crisis as average asking rents reach new record highs, according to the latest data from property website Rightmove.  

The figures paint a stark picture of a market severely out of balance, with experts warning that the situation is unlikely to improve without significant intervention. 

Outside London, the average advertised rent has soared to £1,316 per month, marking a 7% increase compared to the previous year.  

London itself has seen prices climb even higher, with the average rent now standing at £2,652 per month. 

While the pace of rent growth has slowed from its peak of 12% two years ago, it remains significantly higher than the pre-pandemic norm of around 2% per year.  

This sustained increase is putting immense pressure on tenants, many of whom are already struggling with the broader cost of living crisis. 

Tim Bannister, Rightmove’s property expert, highlighted the severity of the situation:  

“We’ve been talking about the imbalance between supply and demand in the rental market for a long time now, so it’s easy to forget that there was a time before the pandemic where rent price growth was more stable.” 

The root cause of this crisis appears to be a fundamental mismatch between supply and demand. 

Rightmove estimates that an additional 120,000 rental properties are needed to achieve sustainable levels of rent growth.  

This shortage is particularly acute in Scotland, which has been hit hardest by the imbalance. 

Interestingly, London has seen some improvement in recent months.  

A fall in the number of tenants looking to move, combined with an increase in available properties, has led to a slowdown in rent price growth in the capital.  

From a peak of 18% in 2022, London rents are now growing at just 4%, the slowest rate in the country.  

However, this offers little consolation to tenants facing the highest absolute rents in the UK. 

The impact of these rising rents is being felt by tenants across the country. 

Polly Neate, chief executive of housing charity Shelter, warned that private renters are “facing a crisis like never before”.  

She added, “With private rents racing to record highs, thousands of people are battling to stay in their homes and face the threat of homelessness if they can’t keep up.” 

Ben Twomey, chief executive of campaign organisation Generation Rent, echoed these concerns: 

“This data shows just how unaffordable rents are for tenants in the current market. Costs for renters are sky high and there is no more room in tenants’ pay packets for further rent increases.” 

The situation is further complicated by additional barriers facing renters.  

Twomey noted that rent increases are “coming in tandem with requests for multiple months’ rent upfront, and need for guarantors, making finding a new home even more difficult.” 

As the crisis deepens, calls for government intervention are growing louder.  

Nathan Emerson, chief executive of Propertymark, argued for a reform of the tax system to encourage investment in the private rental sector.  

“Propertymark has long argued that the private rental sector needs more houses to stabilise rental prices, but there is a myriad of other factors that can contribute towards making the market more attractive for both investors and tenants,” he said. 

The Department for Housing has pointed to its Renters (Reform) Bill as a step towards addressing these issues.  

A spokesperson stated, “Our landmark Renters (Reform) Bill will deliver a better deal for renters and landlords, including support tenants to challenge unreasonable rate rises so that all tenants have greater security in their homes.” 

However, critics argue that more immediate and substantial action is needed.  

With the average property finding a tenant in just 17 days – the quickest time period recorded by Rightmove since November 2022 – the pressure on the rental market shows no signs of abating. 

Emerson argues, “With a General Election coming this week, Propertymark would like to see the next government reform the tax system so that more investors can be persuaded to invest in the private rental sector and lower rents for tenants in the long term. 

“Whilst we support a greater supply of houses, there has to be a sensible deliverable programme mindful of protecting the green belt wherever possible.” 

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