60% of private tenants hit by rent rise, survey shows

Three in five private renters were asked to pay a higher rent in the past year, according to a survey by campaign group Generation Rent.

The number of tenants who reported their landlord had passed on rising interest rates has tripled since the last survey in November, from four percent to 12% of private renters, but the most common reason for rent increases is rising market rents – reported by 17% of private renters.

Evictions are also up, with one in five private renters being told to move out in the past 12 months, up from 14% in November. This overall evictions figure includes 12% who have been served a no-fault Section 21 eviction notice, up from nine percent in November.

Generation Rent called on the government to finally abolish Section 21 evictions and make it easier to challenge rent rises as soon as possible through the Renters Reform Bill. With many landlords struggling to cover interest rate rises, tenants need protection from unaffordable rent hikes and where landlords need to sell, Generation Rent said the government should introduce measures to encourage them to sell with sitting tenants.

The campaign group also urged the government also to relink Local Housing Allowance with market rents in order to improve affordability, and to do more to build more homes in the places people want to live.

Generation Rent surveyed 1,021 supporters who rent from private landlords online in June and July. The findings on rents include:

• 60% have faced a rent increase in the past year, up from 50 percent in November and 45 percent 12 months ago
• 20% of all private renters (i.e. one third of those who faced a rent rise) were asked to pay more than £100 more per month, up from 12% in November
• 66% of those facing rises of £100 or more per month are now paying them – 15% negotiated it down and 10% have moved out as a result. In contrast, 90% of people facing rises of £50 or less are paying those increases. 10% of respondents whose rise was between £50 and £100 successfully negotiated it down. Just three respondents said they had challenged the rent increase at tribunal.
• The survey asked if the landlord or letting agent gave a reason for the increase in rent. 12% of private renters had their rent increased because of higher mortgage payments, up from four percent in November. However, the most common reason given was “higher market rents” at 17%, slightly up from 16% in November. Cost of living/inflation was also up as a reason for rent increases, affecting 11 percent of private renters compared with seven percent in November.

Generation Rent analysis of UK Finance and Bank of England figures estimates that 14% of private tenancies are vulnerable to unsustainable increases in mortgage rates. While this is equivalent to around 800,000 households, it means that interest rates are less of a factor in setting rents than wider market forces.

Ben Twomey, chief executive of Generation Rent, said: ‘A cost of renting crisis is forcing tenants to bear the worst of the economic turmoil right now. While many mortgage holders have yet to see their monthly payments increase, most private renters have already faced a rent hike this past year.

‘So far only a minority of landlords have been affected so badly by rising rates that they are passing them on to tenants. But the rising cost of rent is a much wider problem caused by the failure to build enough homes where people want to live, and the ability of landlords to raise rents regardless of what their tenant can afford.

‘The government’s response to this needs to put tenants first: prevent unaffordable rent increases, and protect tenants in their homes if their landlord needs to sell. Tenants relying on benefits need their housing support raised to cover what rents actually cost, and, to meet demand, we need a massive programme of building, particularly of social housing.’