Rise in rents highlights affordability issues

New data published by Rightmove has shown that the average advertised rent of homes outside of London has risen to another new record this quarter of £1,365 per calendar month (pcm), marking a £400 rise compared to five years ago.

Rightmove’s research also notes that the yearly pace of rent growth continues to slow. This 44% increase in rents compares to a 36% increase in average earnings over five years.

StepChange Debt Charity has responded to the data, saying that housing costs have been a key driver of problem debt for its clients renting privately over the past five years, particularly when faced with other cost of living pressures.

Richard Lane, Chief Client Officer at StepChange Debt Charity, said “The last five years have hit household finances hard, but few have felt it more sharply than those in the private rented sector (PRS). The majority of our clients struggling with debt are renters, with a third in the PRS. Our data shows that among StepChange clients, housing costs take up 37% of private renters’ incomes on average – compared to 29% among social renters and 27% among mortgage holders. When so much of your income goes on rent, it’s no wonder private renters are more exposed to debt and financial hardship.

“Private sector rents continuing to outpace inflation is a clear sign that the root of the crisis goes beyond the scope of the Renters’ Rights Bill. We welcome the changes the Bill brings forward to balance rights between landlord and tenant, including an end to Section 21 ‘no fault’ evictions. However, tackling the lack of affordability in the PRS must be a key priority for this Government in order to secure a better deal for private renters.”