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Residential rents in August jumped by 12 per cent on average across the UK, according to data from estate agent Hamptons, the largest annual increase on record.
London led the way with a 17 per cent year-on-year rise to £2,332 a month, which means tenants in the capital have experienced double-digit rent increases in 16 of the past 18 months.
Nationwide, landlords pushed monthly rents on newly let properties up to £1,304 on average in August, the largest annual increase since Hamptons began tracking the data in 2014. The sharp jump in rental costs comes as rising interest rates have increased mortgage payments.
“Each passing month has ushered in a new rental market record,” said Aneisha Beveridge, head of research at Hamptons, adding that rents across Great Britain have increased more in the past year than they did between 2015 and 2019.
The unrelenting increases will add to the pressure in Westminster to tackle the rental crisis. A blame game erupted within the governing Conservative party at the end of last week, after the renters’ reform bill, which would end “no-fault” evictions in England, was delayed again.
Some supporters of the bill claim that its crucial second reading in the House of Commons is being held up by vested interests in the government whips’ office, where five of 16 whips own rental property.
The claim was rejected by one source in the whips’ office as “absurd”, instead insisting that any concerns that may have been flagged reflected those of the “wider parliamentary party.”
The sharp increases in London have put the capital at the forefront of a nationwide battle to cope with the spiralling cost of rented accommodation, which has become a key cost of living pressure for millions of households and prompted calls for political action.
London’s Labour mayor Sadiq Khan repeated calls on the government for urgent action, including giving him powers to freeze rents in the city. “The national crisis in the rental market clearly demands further action from government,” Khan’s office said.
It added that the government should increase housing benefits and invest “the £4.9bn a year that’s needed to deliver the affordable housing that London needs”.
Both the Conservatives and the main opposition Labour party, which is well ahead in the polls with a general election expected next year, have previously signalled they are unlikely to introduce powers to impose rent controls.
The government said: “Evidence shows that rent controls in the private sector do not work,” adding that the government was investing billions in affordable housing and that households struggling with housing costs could access a range of financial help.
Ben Twomey, chief executive of campaign group Generation Rent, said rent control and an increase in benefit payments were needed to “give breathing space to renters while construction is ramped up to tackle the underlying shortage”. He also called for council tax reform to discourage “homeowners [hoarding] more space than they really need”.
Rents rising faster than wages has strained affordability. The median London renter paid 30 per cent of their gross income, the highest in at least five years, based on a 12-month rolling average compiled by DataLoft. Excluding the capital, UK average rent accounts for a quarter of earnings.
In Scotland, where the government has limited rises for sitting tenants to 3 per cent, rents on newly-let properties jumped a record 13 per cent year on year, Hamptons said, as landlords tried to capture as much rental uplift as possible in between tenancies.