Tough year ahead for private renters, warns UKALA

Some 4.6 million households in England rented from a private landlord in 2021/22, including an increasing number of families with children.

These renters face a difficult year ahead, however, as rental payments soar while the number of suitable properties declines, according to a new survey from the UK Association of Letting Agents (UKALA).

The survey, conducted between late November and early December 2022, revealed that 79% of the 1,100 member letting agents in England, Scotland and Wales predict rent rises in 2023 – 58% by up to 10%, and 21% by over 10%. Virtually no members predict rents falling, while 17% forecast no change at all.

Additionally, nearly 68% of respondents expect rent arrears to increase, and 8.5% of those think arrears will more than double. Increases are most likely in Greater London, the South East and South West.

The results are concerning but not surprising, says Tim Clark, chairman of UKALA: “The economic situation in the UK is, as we know, going to be difficult next year, and this will clearly impact on rents, due to rising costs for landlords and increased tenant arrears due to affordability.”

Alongside rent increases, member agents are forecasting landlords will reduce their portfolios, with 61% reducing their stock slightly, and 28% significantly (by more than 10%). No agent predicted that landlords would increase their portfolios, while 11% forecasted no change.

“The increasing burden on landlords, which has been happening for quite some time, is now starting to have a real impact on the availability of rental stock in the private sector,” Clark added. “Our survey results show this quite starkly.”

Jonathan Rolande, property expert and founder of the not-for-profit National Association of Property Buyers (NAPB), says: “These findings make grim reading for tenants, who may well see eye-watering rent increases this year. This is thanks to a toxic combination of scarcity of property, landlords selling up, others asking tenants to cover the cost of mortgage increases and many increasing simply because they can. With many rental properties in older, poorly insulated buildings, tenants are often paying more to heat their homes too, and rent increases will stretch some to breaking point.”

Furthermore, in 2021, the English Housing Survey estimated that 23% of homes in the private rented sector (PRS) did not meet the Decent Homes Standard. These homes were more likely to have at least one Category 1 hazard under the Housing Health and Safety Rating System (HHSRS), a risk assessment-based regulatory model used by local authority environmental health officers.

The HHSRS, which is currently under review following criticism that it is overly complex, should enforce the Homes (Fitness for Human Habitation) Act 2018, which requires all private sector landlords in England to ensure their properties, including communal areas, are fit for human habitation, are in a good state of repair and are well-maintained.

A government white paper, A Fairer Private Rented Sector, published in 2022, details a 12-point action plan to provide a fairer, more secure and higher-quality PRS. It includes commitments to halve the number of non-decent homes by 2030 and require privately rented homes to meet the Decent Homes Standard for the first time.

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