New research shows more than two million households in the UK’s private rented sector are struggling with unaffordable housing costs.
This morning (11th May), the Institute for Public Policy Research (IPPR) published new findings that show 2.4 million households are now paying unaffordable rents, representing more than 45% of private renters – an increase of over 250,000 households since 2023/24.
If this wasn’t bad enough, the think tank warns the number will rise to 2.5 million by the end of the current parliament if no action is taken.
The analysis highlights affordability pressures are no longer confined to the lowest-income renters. Data shows three quarters of working-age renters are battling with high costs.
Researchers point to rising inflation and interest rates as factors behind higher rents, claiming tenants have little protection from sharp increases.
The Renters’ Rights Act was introduced at the beginning of this month, though critics argue it doesn’t do enough the help tenants with high living costs.
To address the problem, IPPR is calling for a system of rent stabilisation. It proposes limiting annual rent increases through a ‘double lock’, linking rises to whichever is lower – inflation or wage growth.
The think tank said if such a system had been introduced in 2020, rents would be around 7% lower by the end of the decade. It estimates the average renter in England could save £850 a year, with renters in London potentially saving more than £1,700.
Dr Maya Singer Hobbs, senior research fellow at IPPR, said: ‘Millions of renters are being pushed to the bring by a housing market that simply isn’t working for them.
‘This is no longer a marginal issue affecting a small group – it is a mainstream cost of living crisis hitting working households across the country.’
‘Without action, things will get worse,’ she continued. ‘The current system leaves renters exposed to global shocks and rising costs they have no power to control.’
Within the research, experts note the rent cap would include time-limited exemptions for new-build properties, to ensure new homes continue to be added to the market.
Tom Copley, deputy mayor for housing, added: ‘I welcome this report and IPPR’s push for rent stabilisation and applaud the consideration they’ve given to balancing the twin problems of supply and affordability.
‘The mayor believes the next step is for ministers to devolve the power to cap rent rises so we can tackle these issues in the capital. The evidence clearly shows that Londoners would overwhelmingly back new plans to put a cap on rent increases.’
Image: Jon Tyson/UnSplash
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