A new analysis claims that 2.4m households in the UK’s private rented sector are facing what it calls “unaffordable housing costs” with the situation worsening rapidly.
The report from the Institute for Public Policy Research (IPPR) finds that over 45% of private renters live in what it describes as unaffordable housing – an increase of over 250,000 households since 2023/24.
And it says that without intervention, this is going to grow to 2.5m by the end of the current parliament – an increase of 340,000 since 2023/24.
Despite the scale of the crisis, significant numbers of households receive no direct housing support through the benefit system, and affordability pressures are not confined to just the lowest-income groups. Three quarters of working-age renters with affordability issues are in working households.
The report argues that recent global shocks – from inflation to rising interest rates – have been passed from landlords directly onto renters, who have little ability to absorb or avoid sudden rent increases.
The think tank recommends the government stabilises rents, with annual rent increases limited by a “double lock” linked to whichever is lower: inflation or wage growth.
Analysis suggests that, had such a system been in place since 2020, rents would be around 7 per cent lower by the end of the decade – saving the average renter around £850 per year in England, and over £1,700 in London, and reduce the number of households facing unaffordable rents by 140,000 compared to no intervention.
While historically there have been rent caps that had unintended consequences, such as reduced rental supply, the think tank argues that clever design choices can avoid this.
The cap should be accompanied by policies such as time-limited exemptions for new-build properties, to make sure more houses continue to be built and rental properties get added to the market.
Dr Maya Singer Hobbs, senior research fellow at IPPR, says: “Millions of renters are being pushed to the brink 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. The current system leaves renters exposed to global shocks and rising costs they have no power to control.
“Government has taken important steps to strengthen renters’ rights, but it now needs to go further. A fair system of rent caps would rebalance the market, protect households from sharp increases, and ensure that rents grow in line with what people can actually afford.”
This article is taken from Landlord Today