The UK’s rental market has seen a significant increase in costs, with the average rent now nearing £1,300 a month, marking the fourth consecutive monthly increase. This trend is unfolding as the Renters Reform Bill continues its journey through the legislative process, sparking concerns and calls for urgent governmental action.

The Rising Cost of Renting

According to the latest figures from the HomeLet Rental Index, the average UK rent climbed by 1.6% to £1,294 in April, compared to the previous month. This latest increase pushes the year-over-year rise to 7.9%, signaling a sustained upward trend in rental prices.

Regional Highlights

• Greater London: The capital experienced the most substantial hike, with rents rising by 3.1% in April alone, reaching an average of £2,167. This represents an 8.2% increase from the previous year.
• East Midlands: This region stands out as the exception in the current climate, with a slight decline of 0.1% in rents. However, even in this area, rents are still up 7.3% over the past year, reflecting the broader national trend.

The Financial Burden on Renters

The increase in rent is consuming a larger portion of renters’ incomes, with UK residents now spending an average of 33.3% of their wages on rent. In London, this figure is even more pronounced, with renters allocating 39.1% of their income to housing costs.

Andy Halstead, CEO of HomeLet and Let Alliance, emphasised the severity of the situation, suggesting that if current trends continue, rent could rise by nearly 20% over the next year. This would translate into tenants paying over £250 more each month. Halstead warns of a looming “cost of renting crisis” and stresses the need for clarity and action from the government to stabilise the situation.

Legislative Uncertainty and Its Impacts

The Renters Reform Bill, which recently passed its third reading in the House of Commons and is now headed to the House of Lords, is at the heart of current rental market woes. The bill, first introduced by former Prime Minister Theresa May in 2019, aims to overhaul major aspects of rental laws, including the controversial “no-fault” evictions under Section 21.

However, Housing Secretary Michael Gove has indicated that the abolition of Section 21 evictions may not be guaranteed before the next general election, expected by the end of the year. This uncertainty has added to the instability of the private rental sector.

Halstead points out that the rental market has grown increasingly chaotic over the last five years, partly due to delays and uncertainty surrounding the Renters Reform Bill. This uncertainty leads to “landlord churn” and market volatility, complicating the lives of both landlords and tenants.