The Labour government has promised to abolish no-fault evictions, which allow landlords to evict tenants without giving a reason, through its Renters’ Rights Bill after the Conservatives’ Renters Reform Bill failed.
Labour has promised the bill will end bidding wars between tenants as well as giving renters stronger rights to keep pets and avoid discrimination if they have children or are in receipt of benefits.
Lucy Tiller, policy and public affairs manager at the Renters’ Reform Coalition, said: “Everybody needs a secure home, but unaffordable rent hikes are forcing families out of their homes and communities and driving renters into destitution.
“The forthcoming Renters’ Rights Bill is welcome, but in its current form it won’t address this escalating crisis – the government should strengthen it with a cap on rent increases within tenancies, to help tenants stay in their homes. And in the longer term we need a national rental affordability commission, to explore ways to put the brakes on soaring rents for good.”
The devolved countries in the UK have engaged with the issue of rising rents more directly than Westminster in recent years. The Scottish government limited rent increases and banned evictions between September 2022 and April 2024 and are planning long-term rent controls. The Welsh government ihas also consulted on the idea of bringing in rent controls.
How much is rent in UK?
Around 4.7 million households use the private rented sector in England with 11 million renters. Around 450,000 households in Wales are private renters while 887,000 households renting in Scotland, including 323,000 renting privately.
The private rented sector is now the second biggest tenure of housing in England behind owner occupiers, making around a fifth of all households in the country.
The most recent ONS statistics show average rents increased 9.3% annually to £1,362 a month in England, rose 8% to £772 in Wales and 6.5% to £980 in Scotland in the year up to November 2024.
Renters in London are seeing the biggest increases in the UK with rents 11.6% higher than in 2023 – the highest rise on record – at an average price of £2,206.
The Westminster government unfroze local housing allowance in April 2024 but tenants on low incomes are still facing a challenge to keep up.
Labour declined to help renters keep up with rising rents when chancellor Rachel Reeves opted not to raise local housing allowance in line with the bottom 30% of market rents.
Joseph Rowntree Foundation’s Rachelle Earwaker said: “Local housing allowance (LHA) was kept frozen at the latest budget, so the gap between these rising rents and the shortfall families need to cover is getting wider. The government must reverse this decision and permanently link LHA to what rents cost, so renters don’t face another winter of impossible choices. They must also ensure that the other benefits families receive actually cover the cost of their essentials.”
Households have faced rising bills and food costs in recent years as part of the cost of living crisis and there is no respite when it comes to housing costs.
But there has been little action on the issues driving rising rents, namely high demand for properties and a lack of supply.
Research from Zoopla found tenants are paying £3,240 more to rent each year than during the pandemic in 2021.
A 27% rise in the cost of a new lets has seen tenants face an extra £270 a month in rents on average over the last three years while earnings have only grown by 19% over the same period, according to the property portal’s analysis.
Why is UK rent so high?
The short answer to why rent is so high is because there is a shortage of affordable housing.
There is a housing crisis in the UK because not enough homes have been built by successive governments in the last few decades at a time where social housing stock has been sold off to the private sector through Right to Buy or demolished and not replaced.
An estimate from the National Housing Federation found around 340,000 new homes should be supplied in England each year with 145,000 them to be affordable. Shelter has called for 90,000 social rent homes to be built each year for the next decade.
The previous Conservative government has previously targeted 300,000 new homes in England – a 2019 manifesto commitment – but failed to hit that mark. In 2023-24, 235,00 new homes were supplied, but the signs ahead suggest annual delivery could fall.
Despite this, Labour has committed to building 1.5 million homes by 2029, including prioritising social rent homes to ease the demand on the private rented sector in the long-term.
Meanwhile, areas like Cornwall where tourism has seen a surge in short-term lets through the rise of Airbnb in recent years faces even more pressures on demand.
The private rental sector has picked up the slack in recent years and has doubled in size over the last two decades.
The stiff competition has seen rents on the market increase but many landlords have kept pace by putting up rents for existing tenants.
While generally speaking there is a shortage of private rental properties across the UK, the difference between supply and demand changes from region to region.
Will rent prices go down in 2025?
Rising rents are having an impact – the latest Ministry of Justice (MoJ) figures show the number of tenants evicted by private landlords continuing to surge.
A total of 2,830 households were evicted from their homes through no-fault eviction, also known as a section 21 eviction, from July to September 2024 – up by 23% during the same timeframe in 2023.
The MOJ figures also show that 8,425 households were served with a section 21 eviction notice from July to September this year, the highest number in eight years.
Rents on new properties are starting to hit the highest point of what tenants can afford, which is seeing rises start to slow. But it is a long way from rents starting to fall.
There is reason to think rents could yet rise further.
Zoopla is forecasting annual rent inflation of around 4% in 2025 – the lowest rate for three years.
Meanwhile, the National Residential Landlord Association has continually warned of a landlord exodus ahead of the introduction of the Renters’ Rights Bill driving up prices.
But the Resolution Foundation is forecasting a different reason for rents to rise and disputes the suggestion of landlords leaving the private rented sector.
The think tank said the surge in rent prices for new tenancies seen in recent times is set to filter into existing rents and could see payments rise by 13% over the next three years.
That is set to outstrip the 7.5% increase in wages forecasted by the Office for Budget Responsibility over the same period.
“With more families renting privately, and renting for longer too, these rent surges are a bigger problem for Britain, and require bolder solutions from policy makers,” said Resolution Foundation’s Cara Pacitti. “Short-term solutions include regular uprating of local housing allowance to support poorer families, and the ultimate longer-term solution is to simply build more homes.”
Labour’s Renters’ Rights Bill is expected to make it into law by the summer of 2025. What will it mean for private rental prices? Time will tell.
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