Welcome to the Research Brief, where Spotlight, the New Statesman’s policy section, brings you the pick of recent publications from the government, think tank, charity and NGO world. See more editions of the Research Brief here.
What are we talking about this week? Rent and why it’s going up. The Resolution Foundation just published a report called: “Through the roof: Recent trends in rental-price growth”. They found that, on average, rents have risen by 20 per cent since the start of 2022.
Don’t tell me about it, get my landlord to do something. Well, actually the report found that neither rising landlord costs nor landlord greed alone could explain the rise in rents. More than a third (38 per cent) of landlords don’t have a mortgage, but it does acknowledge that landlords have more power than tenants when it comes to setting the rent. Some have suggested that landlords are selling up and reducing the overall supply of rented housing, particularly in response to new regulations on no-fault evictions coming in, but there is little evidence of this affecting a large enough number of homes.
Is the population increasing too rapidly for us to build adequate housing? Not really. Housing supply has fluctuated for a while. But right now, the ratio of houses available to number of families is roughly the same as it was in the 1990s (780 homes to 1,000 families), so it’s not about population growth or immigration.
Screw this, I’m leaving London. Too late – rents are rising across the UK but are rising faster in some areas. Rents in Bristol, south Gloucestershire, Leicester and parts of Greater Manchester have risen by 50 per cent since 2016. By contrast, rents in West Lancashire, Richmond upon Thames, Redcar and Cleveland, and Blackpool have risen by less than 15 per cent in that time.
How broke am I? The average private renter spends a third of their income on rent. Private renting is the most expensive form of living, and it provides relatively small and poor-quality housing. The threat of a no-fault eviction is also always around the corner. One in five families now lives in private rented housing (up from 11 per cent at the end of the 1990s), and 30 per cent of low-income families headed by someone aged 30-49 now privately rent.
So, who should I picket? Capitalism. Rises in earnings are a big part of the overall rise in rents. If your wages go up, your rent does too. This was a relationship that was disrupted during the pandemic but has since returned in order to “correct” the market. Higher inflation and interest rates since 2022 have also fed into this problem.
And I just put down a deposit on a takeaway coffee. Don’t expect to be splashing out on luxuries like coffee or showers. The Resolution Foundation predicts that rents will continue to rise by a further 13 per cent over the next three years.
How do we avoid this bleak future? The Resolution Foundation suggests a rent stabilisation model, where a landlord can’t increase rents beyond inflation for the first three years of a tenancy. Increasing the Local Housing Allowance (LHA) would also mean poorer people are less likely to be “priced out” of rented housing, but the government has said it will freeze the LHA from 2025. Long-term, the only way is to build more homes.
In a sentence? The private rental sector is broken – we need curbs on price hikes, and for someone to build some damn housing.
Read the full report from the Resolution Foundation here.
If you have a report, briefing paper or a piece of research that you’d like featured in the Research Brief, get in touch at spotlight@newstatesman.co.uk.
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