It’s no surprise that more and more tenants are looking to rent privately in an attempt to avoid shelling out large sums of cash for extortionate agency fees and deposits. Some have even taken to social media to show how bad the renting situation has become.
Last night on Twitter, the hashtags #VentYourRent and #RantYourRent became trending topics, where Twitter users expressed their dissatisfaction at London rental prices by revealing the problems they have had with landlords and letting agents. From ceilings caving in, to mice found under the floorboards, tenants held up cardboard signs showing the poor standard of living people can expect when moving to London. It’s a rather depressing read!
The capital’s housing crisis has been a hotly contested debate between London’s mayoral candidates too, all of whom have made it a top priority if elected. A YouGov poll showed that 67% of Londoners wanted the issue of housing to be at the forefront of the candidates’ manifestos. This alone shows that the demand for affordable homes in London has reached boiling point, and that renters want the issue resolved quickly. A mixture of poor renting regulations and skyrocketing fees have pushed housing further and further up the political agenda in recent years. Labour’s Sadiq Khan took to Twitter to support the #VentYourRent campaign in order to “show how out of control the Tory Housing Crisis is” and stated that he would “stand up for renters.” Candidate for the Green Party, Sian Berry, also got involved with the trending topic by tweeting “Got home today to a letter saying my rent is going up again. Not good timing anytime”. Speaking to the Huffington Post, Conservative Zac Goldsmith said he wants to “increase the number of homes being built” and is “committed to increasing building up to 50,000 [homes] a year”.
Dan Wilson Craw, policy manager at Generation Rent, told the Evening Standard “The candidates for Mayor describe London as the greatest city on Earth, but as long as growing numbers of people are paying huge sums to live in squalor, they’ll have a lot of work to do to make that a reality,”
The rising cost of living has proven to be a serious issue in the UK and soaring rental prices have made a significant contribution to the ever rising costs of living in London. According to TDS, 53% of tenancy deposit disputes across the UK were brought up by tenants themselves, with over half of the reasons for the disputes being put down to a failure by the letting agent or landlord to repair damage to the property.
New regulations have proven to be costly too. With the introduction of Right to Rent immigration checks, which are compulsory for landlords by law, many tenants expressed their concerns that this could present a new threat to the capitals saturated rental market. Right to Rent immigration checks were first trialled in a number of West Midland areas, and since February 2016, landlords and letting agents have been responsible for checking that tenants and lodgers have the legal right to live in the UK. Legal documents such as passports or official documents must be produced and the landlord must take copies. Letting agents may charge landlords for the service, and there are concerns that this cost will be passed on to tenants.
Unfortunately for tenants, they may have to endure even further increases in their rental costs, as many landlords have admitted that they will likely raise rents to cover the costs of new Government regulation for the Buy To Let market.
An even greater concern for both tenants and landlords is the possibility of an interest rates rise and the impact this would have on the thousands upon thousands of Buy To Let mortgages in the UK housing market. If interest rates do rise in the near future, they will significantly increase mortgage payments for the UK’s BTL landlords, and the majority of landlords have admitted that they will have no choice but to raise rents on their properties to cover the costs of higher monthly mortgage payments.
With tenants’ budgets already stretched to the limit, there is a serious concern that a potential interest rate rise and subsequent rent increase could cause many tenants to fall into arrears and thousands of BTL mortgages could go into default as a result. The UK market should take head of the lessons from the US housing market crash, and should look to future proof the rental market to avoid a similar collapse here in the UK.