Selling up and raising rents: how landlords are cashing in and exacerbating the cost of living crisis | Ruby Lott-Lavigna

Sarah* had been living with a friend in the same rental flat in south-west London for the past three years. But when she came to renew her tenancy this June, the agency asked for an extra £217 a month – a staggering 14% increase.

The 26-year-old tried to negotiate, citing a multitude of problems – from an ongoing mice infestation to security issues with the flat’s shared entrance. Within 30 minutes of her email, the agent had advertised the property on RightMove, ready to be snapped up by the highest bidder. The landlord would not negotiate the price, she was told, leaving her with no choice but to pay up, or move out.

Britain’s dire rental market is nothing new. Stories like Sarah’s are so common now that for jaded readers perhaps they verge on the banal; insert any name, age, and your choice of British metropolis, and it would fit the formula. But somehow, the rental market has reached a heady new state of crisis.

Private rents are growing by the fastest annual rate since 2016, according to the Office for National Statistics. London has long been at the coalface of these astronomical price hikes – the median monthly rent in the capital is now nearly twice that of the rest of England. But even areas across the UK that were once seen as affordable, such as Scotland and the east Midlands, are weathering some of the highest annual rent increases since records began.

Viewed through an affordability lens, the picture looks even bleaker. Across the country, young people and those from poorer backgrounds are now losing at least 30% of their monthly income to rent. In fact, only those in the top wealth bracket in London are now able to contribute less than that.

Of course, tenancies were already unaffordable and insecure before this year. But rampant inflation, soaring energy bills and rising mortgage interest rates are colliding to aggravate an already unstable picture. Higher mortgage repayments for landlords are increasingly being passed on to tenants in the form of uncapped rental increases. The maintenance costs and tax obligations of running a rental business have become more punitive, according to Chris Norris from the National Residential Landlord Association, and raising the rent responds to these “exponentially” rising costs. But with demand far outstripping supply, landlords with existing tenants are able to increase the rent in line with market value, regardless of whether their costs are actually increasing, says Dan Wilson Craw, deputy director of Generation Rent.

The stark reality is that it is a landlord’s market and tenants have very little recourse. “Ultimately every renter is vulnerable to an unaffordable rent increase,” Wilson Craw tells me. Section 21 notices, which were outlawed during Covid, allow private landlords to evict tenants without having to provide a reason and are once again providing a frictionless way for unscrupulous landlords to line their pockets, by turfing out existing tenants in favour of higher-paying ones. There is at least a long-awaited plan to end the practice in the next parliament.

Another factor exacerbating the crisis is a shrinking pool of private rental stock. Some landlords seem to be cashing in on the booming property market by selling up. In March 2022, the number of rental properties advertised on letting agent websites had halved, compared with like for like data from 2019, according to one report. But the picture isn’t clear cut – other data points to a small rise in private rental stock – though not nearly enough to satisfy demand for affordable housing.

And as pandemic-era protections are rolled back, the data is already capturing the fallout. Homelessness increased by 11% in the first three months of 2022 as a result of high rents and energy bills, with a quarter of households homeless or at risk because of the loss of a private tenancy. A record number of 50- and 60-year-olds are now turning to house-shares, and “lifetime renting” is becoming an increasingly likely reality for multiple generations.

Rental caps seem like an obvious solution, an idea supported by tenants’ rights groups like Generation Rent. Research has, so far, been US-centric, but the data looks promising. Studies consistently show rent controls stop the displacement of communities and are generally successful at keeping rents down – as long as their net is cast wide enough. London mayor Sadiq Khan has touted the idea regularly during his term, but with a quarter of Conservative MPs being landlords (and Khan having no remit to cap rents in the capital), it seems unlikely this government will prioritise driving down prices.

It would be obtuse not to recognise how Britain’s bottomed-out social housing offering contributes to this growing climate of housing insecurity. Councils need to buy back homes lost under right to buy and increase their housing stock in order to alleviate pressure on an unregulated private sector. Section 21 evictions need to be banned – a promise offered as part of the Tories’ renters reform bill in 2019, but still not law.

There’s another option, too. Faced with being kicked out of my own home, my housemates and I have been trying to turn it into a cooperative under collective ownership. While the UK’s co-op legislation is weak, our goal to remove our rental home from for-profit ownership gets to the heart of the crisis gripping the nation. Housing is still seen as something to profit from, instead of somewhere to live, survive and exist.

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