Should the housing industry be concerned that rents are rising so rapidly and will there come a tipping point when tenants who are unable to buy can also not afford to rent?

Robbie de Santos, assistant policy officer at Shelter

Absolutely. At Shelter we’re concerned about what these rises are going to mean for a sector that houses a million more households than it did a decade ago, has seen rent increases of over 10% in some areas over the past year, and where many tenants are utterly disempowered.

The changes to homelessness legislation, combined with no new funding for social housing and the lack of mortgage credit for first-time buyers mean that private renting is the only option for an increasing number of households. This is from the more vulnerable to young professionals.

With pay frozen for many employees and inflation rising, renting privately is going to be increasingly unaffordable for many households.

Sponsored

Going digital

Sponsored by Halifax Intermediaries

Recent Shelter research found that more than two million people have used credit cards to pay their mortgage or rent, an increase of almost 50% in a year. Likely rises in rents are only going to put struggling households under more pressure.

Shelter is particularly concerned about the impact high demand for private rents is going to have on tenants’ ability to make good choices when it comes to renting a home.

As the market stands, tenants have very little information about their landlord before they sign a contract and have no way of knowing whether they are reputable and responsive.

With some estate agents reporting as many as 20 tenants chasing every property, there is a risk that tenants will jump into contracts with rogue landlords who could make their life a misery.

At the very least, there should be more council level intervention to drive up standards.

Also answering in this week’s Market Watch are:

Ian Potter, operations manager at ARLA

David Whittaker, managing director at Mortgages for Business