The Tenant Trap: Are Rising Rents Pushing the UK Toward a Renters’ Crisis?

The Tenant Trap: Are Rising Rents Pushing the UK Toward a Renters’ Crisis?

7:00 AM, 18th November 2024, About 2 weeks ago 12

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The Tenant Trap: Are Rising Rents Pushing the UK Toward a Renters’ Crisis?

The UK’s private rented sector is in turmoil. As landlords exit the market in record numbers, tenants are finding themselves trapped in a vicious cycle of rising rents and shrinking housing options. What used to be a relatively stable rental market is now veering dangerously close to a full-blown renters’ crisis.

For tenants, it feels like they’re being squeezed from all sides—unable to save for a home of their own and watching rents climb higher with each passing year. So, what’s causing this crisis, and how can it be stopped?


The Squeeze: Why Are Rents Rising?

The main driver behind rising rents is simple: fewer homes available to rent. As more and more landlords leave the market, the supply of rental properties is shrinking. But demand isn’t going anywhere. In fact, as house prices remain out of reach for many, more people are relying on the rental market than ever before.

Emma and Jack are one such couple. They’ve been renting in London for five years, hoping to save enough for a deposit on their first home. But with house prices continuing to rise, that deposit feels like a moving target. In the meantime, their rent has increased three times in the last two years. Now, they’re spending over 40% of their monthly income on rent—leaving them with little chance of ever saving enough to buy.

Rising rents are creating a financial trap for renters like Emma and Jack. The more they pay in rent, the less they can save for a deposit, forcing them to remain stuck in the rental market with no way out.


The Landlord Exodus: Fewer Homes, Higher Prices

Why are landlords leaving? The reasons are clear—punitive tax changes, like Section 24, and an onslaught of regulations are making it increasingly difficult for smaller landlords to turn a profit. For many, the costs simply outweigh the benefits.

Take David, who owns a single buy-to-let property. For years, it was a steady source of income that helped supplement his pension. But since the introduction of Section 24, David’s tax bill has soared, and now he’s facing the prospect of having to sell the property just to stay financially afloat. Thousands of landlords like David are making the same decision—sell up and get out.

With fewer landlords in the market, tenants are left competing for a shrinking pool of rental homes. And as the laws of supply and demand dictate, fewer homes mean higher rents.


Caught in the Trap: How Rising Rents Impact Tenants

For many tenants, rising rents are more than just an inconvenience—they’re becoming a serious financial strain. Renters are already spending a large portion of their income on housing, and as rents rise, that burden is only getting worse.

Take Rachel, a teacher renting a flat in Birmingham. Her rent has increased by £150 a month since her landlord sold to a new corporate owner. While Rachel’s salary has barely budged, her rent is eating up more and more of her income. Now, she’s cutting back on essential spending just to keep a roof over her head.

The rising cost of rent is hitting low- and middle-income tenants the hardest. Many are being forced out of city centres, moving to less convenient areas with longer commutes. Others, like Rachel, are sacrificing their quality of life just to make ends meet. And for those already struggling, rising rents could push them into housing insecurity or even homelessness.


The Dream of Homeownership: Slipping Further Away

One of the most damaging effects of rising rents is how they’re pushing the dream of homeownership further out of reach for millions of renters. For years, tenants have been trying to save enough for a deposit to buy their first home. But with rents rising faster than wages, that goal is becoming impossible to achieve.

Take Ben, a young professional in Manchester. He’s been renting for eight years, saving diligently to buy his own home. But as his rent continues to rise, he’s finding it harder to set aside money each month. The rising cost of living is eroding his savings, and every time he gets close to having enough for a deposit, house prices rise again.

Renters like Ben are trapped—unable to buy their own homes and stuck in a rental market that’s becoming more expensive by the day.


Are We Headed Toward a Renters’ Crisis?

The reality is that the UK is already teetering on the edge of a renters’ crisis. Rising rents, fewer available homes, and the increasing difficulty of saving for homeownership are all contributing to a housing market that feels broken for many.

As more landlords leave the market, the pressure on the rental sector is intensifying. This isn’t just bad news for tenants—it’s bad for the entire housing ecosystem. The ripple effects of a full-blown renters’ crisis could spread across the economy, affecting everything from household spending to social stability.


How Can We Avoid This Crisis?

There’s no easy fix, but there are steps that can be taken to alleviate the pressure on both landlords and tenants. Here’s what needs to happen:

  1. Tax Reform: The government must rethink policies like Section 24, which is driving landlords out of the market and reducing the supply of rental homes. Reforming these taxes could keep more landlords in the market, stabilising rents.
  2. Incentivise Long-Term Tenancies: Providing incentives for landlords who offer long-term, secure tenancies could help create more stable housing for tenants and keep rents in check.
  3. Build More Affordable Homes: Ultimately, the UK needs more affordable homes—both for rent and for sale. The government should prioritise the construction of affordable housing to increase supply and reduce competition for available homes.
  4. Support Small Landlords: Instead of pushing small landlords out of the market, the government should offer grants and incentives to help them stay in business. This would maintain diversity in the rental market and prevent further rent increases.

Support Property118 in the Fight to Protect Tenants

At Property118, we’re working to prevent a full-blown renters’ crisis. We’re advocating for the reform of harmful tax policies, the protection of small landlords, and the creation of a fairer rental market for tenants. But we can’t do it alone.

If you believe in protecting tenants from rising rents and ensuring that rental housing remains accessible to everyone, please consider supporting Property118. Your donations help us fight for policies that keep rents affordable and protect both tenants and landlords.

Every donation counts. Use the form below to help us fight for a fairer, more affordable rental market.

 

The UK is heading toward a renters’ crisis—but with the right reforms, we can stop it. Let’s work together to protect tenants and secure a better future for the rental market.

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Cider Drinker

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9:19 AM, 18th November 2024, About 2 weeks ago

If I’m being kind, I’d say the rental crisis is one of the unintended consequences of the war on landlords, by successive governments.

However, deep down, I don’t believe the consequences are unintended.

The government will have completed detailed impact statements and will know that rising rents bring in more income tax.

They just don’t care.

Stella

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10:53 AM, 18th November 2024, About 2 weeks ago

Reply to the comment left by Cider Drinker at 18/11/2024 - 09:19
Yes the government dont care but the RRB will limit the upward trend on rents even though for now rising rents are bringing in more tax.

With a lot more tenants applying to tribunals with encouragement from tenant organisations and safe in the knowledge that their rents could be reduced but cannot be increased they are on a winner.

Tribunals will not consider our overhead costs and the rents will no doubt be pegged as low as possible.

I suspect that they will find a way of exempting BTR from this scrutiny!

Tony Edwards

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11:17 AM, 18th November 2024, About 2 weeks ago

I bought my house 30 years ago now a registered HMO as rents in HMO are now very often £600 pcm inclusive in Ipswich. I am not going to put my rents up this high as I do not need to. I notice the £600 a month rooms offered are advertised for many months maybe what people can afford will bring some reality to the market? given Registered HMO properties are in such high demand and some councils declining permission the difficult situation will continue. At next licence time I will have to fit an AFDD electrical upgrade of dubious merit at an estimated cost of £2000 which certainly will not be welcome

Yvonne Francis

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12:00 PM, 18th November 2024, About 2 weeks ago

Mark: If you are advocating Long Term Tenancies then what action are you taking against 'The Renters Reform Bill' which will make all tenancies periodic with possibly only six months fixed.  It's OK advocating things, but what about fighting against a bill which will destroy what you advocate? It's certainly going to destroy the student market which I'm in. 

Monty Bodkin

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12:02 PM, 18th November 2024, About 2 weeks ago

Reply to the comment left by Stella at 18/11/2024 - 10:53
"RRB will limit the upward trend on rents"

i disagree, it will and already has caused rents to increase as landlords exit the market.

"With a lot more tenants applying to tribunals"

Any tenant applying to the tribunal will have difficulty finding a tenancy in future, landlords will check.

Landlords will be very wary of taking on a tenant

Stella

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12:48 PM, 18th November 2024, About 2 weeks ago

Reply to the comment left by Monty Bodkin at 18/11/2024 - 12:02
I hope that your are correct!

Monty Bodkin

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12:51 PM, 18th November 2024, About 2 weeks ago

Reply to the comment left by Stella at 18/11/2024 - 12:48
'Rogue' tenant database here;

https://www.gov.uk/residential-property-tribunal-decisions

JB

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21:26 PM, 18th November 2024, About 2 weeks ago

Reply to the comment left by Monty Bodkin at 18/11/2024 - 12:51
How can you use this to check? I don't see how you can practically do it?

Monty Bodkin

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13:39 PM, 19th November 2024, About 2 weeks ago

Reply to the comment left by JB at 18/11/2024 - 21:26
Just type the potential tenants name into the decisions search box.

Julie

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1:00 AM, 23rd November 2024, About A week ago

Reply to the comment left by Monty Bodkin at 19/11/2024 - 13:39
Excellent! Thank you so much for this link. I didn't know it existed! 🙂

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