Charity warns Renters’ Rights Bill won’t solve affordability crisis

A charity claims the Renters’ Rights Bill will not be enough to fix the affordability crisis.

In response to figures from Rightmove, which reveal rents are £417 a month higher than five years ago, StepChange Debt Charity says private renters are facing a sharp squeeze on household finances.

The charity claims housing costs are a key driver of debt.

Tenants face financial hardship

According to RightMove, tenants now paying an average of £417 more per month, a 44% rise that outstrips the 36% growth in average earnings since the onset of the pandemic in 2020.

Richard Lane, chief client officer at StepChange Debt Charity, claims private renters are more exposed to debt and financial hardship.

He said: “The last five years have hit household finances hard, but few have felt it more sharply than those in the private rented sector (PRS). The majority of our clients struggling with debt are renters, with a third in the PRS.

“Our data shows that among StepChange clients, housing costs take up 37% of private renters’ incomes on average, compared to 29% among social renters and 27% among mortgage holders. When so much of your income goes on rent, it’s no wonder private renters are more exposed to debt and financial hardship.”

However, Mr Lane fails to mention landlords also experience financial hardship, with selective licensing, costs of maintaining the property, Section 24, and other expenses.

A report by Savills also reveals more than half (51%) of individual private landlords report gross income of less than £10,000.

Rents continue to outpace inflation

Mr Lane adds whilst the charity welcomes the Renters’ Rights Bill the government must do more to tackle the affordability crisis.

He says: “Private sector rents continuing to outpace inflation is a clear sign that the root of the crisis goes beyond the scope of the Renters’ Rights Bill.

“We welcome the changes the Bill brings forward to balance rights between landlord and tenant, including an end to Section 21 ‘no fault’ evictions. However, tackling the lack of affordability in the private rented sector must be a key priority for this government in order to secure a better deal for private renters.”