The cost of living crisis continues to worsen as rental prices surge in 2023

The Office for National Statistics have confirmed that in the year 2023 up to March, UK rents have increased by a staggering 4.9%, making rent in the UK at the highest rate on record.

Households are already facing rising energy bills and food costs as part of the cost of living crisis but there is just no break when it comes to housing costs.

Despite the rent cap, Scotland posted the highest annual rental rises in March at 5.1%, followed by England at 4.6%, then Wales with 4.4%.

In London, rents rose 4.8% over the period, higher than the average across England. There were significant differences across the whole of England with the East Midlands seeing rents increase almost 5 per cent compared to 4 per cent in the West Midlands.

It’s not just the private rental sector that has seen rent rises, tenants in social housing saw their rents rise by 7 per cent as of April 2023.

Why is rent increasing?

The short answer to why rent is so high is because there is a significant shortage of affordable housing.

There is a housing crisis in the UK because not enough homes have been built in the last few decades at a time where social housing has been sold off to the private sector through Right to Buy or demolished and not replaced.

Furthermore, landlords themselves are now dealing with additional costs as a result of the cost of living crisis and are passing on these additional costs to their tenants.

If that wasn’t enough, many high street lenders have removed their buy-to-let mortgage products which means landlords can’t get finance for new investments which, in turn, means rental stock is dwindling.

The number of buy-to-let landlords is decreasing. The additional costs suffered by landlords have pushed some towards the exit door as investment properties feel more trouble than they’re worth.

Will rent prices go down in 2023?

There is no sign currently of the supply issue being tackled, so unfortunately in looks like rents will continue to rise at least in the short term. There is likely to be increased competition for rent homes as would-be first-time buyers cannot afford to get on the housing ladder.

Further, as mortgage rates continue to rise, Landlords are passing on these increased mortgage payments through higher rents.  

Meanwhile, more landlords are opting to sell up ahead of the threat of incoming rent reforms, reducing supply further.

Rising rents are having a big impact – the latest Ministry of Justice (MoJ) figures show that there were 5,409 landlord possessions between October and December 2022. This shows that the number of tenants evicted by private landlords after falling behind on rent is continuing to rise at an alarming rate.

What to do if you're struggling with rent payments

If you're struggling to pay your rent or have already missed a payment, it's important to contact your landlord as soon as possible to discuss the situation.

Your landlord isn’t obliged to offer support, but they may be willing to discuss a compromise that will enable you to keep living in the property.

Tenants in England or Wales may be able to qualify for the Debt Respite Scheme – also known as Breathing Space. This gives you a 60-day window in which the landlord won't be able to take enforcement action.