Tenants’ support groups are urging the government to introduce a nationwide rent freeze, in line with new legislation launched in Scotland. The temporary cap on rent increases was introduced by the Scottish government to help tenants survive the cost-of-living crisis.
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As one of a raft of measures in the Cost of Living Protection of Tenants (Scotland) Bill, the news has been welcomed by tenants’ rights organisations. However, cash-strapped private sector landlords fear it will be another nail in the coffin.
Buy-to-let property owners across the UK are waiting anxiously to see whether the government will bring in a similar rent freeze in England and Wales, where many are already selling their portfolio of properties due to rising costs.
Scotland is the first of the home nations to introduce new legislation specifically aimed at protecting private tenants from the current economic climate. The new rules have also temporarily banned evictions, in a similar way to the ban imposed during the Covid-19 pandemic.
Will a rent freeze be introduced UK-wide?
Some MPs are calling for a rent freeze in England and Wales too. Natalie Elphicke, Conservative MP for Dover, has launched a campaign through the Renters’ Reform Coalition demanding a two-year rent freeze in the private sector.
The London Renters’ Union also wants the measures to be introduced in both England and Wales, on the grounds housing costs are householders’ biggest expense.
A spokesperson said everyone “deserves a decent home” where they can enjoy some security. Tenants should be able to live close to their family and feel connected to their local community, while having enough money left to “live a dignified life” after the rent is paid.
However, the National Residential Landlords’ Association has responded that this wouldn’t help address the supply crisis that tenants across the UK are now facing, due to the number of landlords planning to get out of the industry.
The rent freeze in Scotland began on 6th September 2022 and will continue until at least 31st March 2023. There will be regular ministerial reviews and it could be extended indefinitely until economic circumstances change.
If the legislation is introduced in the rest of the UK, it will cover private residential tenancies, short assured tenancies and assured tenancies. It will stop landlords from evicting tenants who are suffering a temporary financial crisis.
What do landlords think?
Critics of the scheme say it doesn’t protect landlords who are already facing struggles of their own. There is a blanket ban on increasing rents in Scotland due to the new law, as the rent cap is set at 0%.
Research has revealed that 34% of landlords believe rental reforms present the “greatest threat” to the market. They are feeling the pinch of the economic crisis, with 20% of those surveyed saying they are planning to start selling off their portfolio if the situation doesn’t improve.
Around one-quarter of 600 private landlords surveyed said rising costs, including energy prices, interest rates and reduced tax relief, were pricing them out of the market.
What is the average rent in the UK?
The average monthly rent for a house in the UK increased between July 2021 and July 2022 from £1,007 to £1,113. The most expensive region is London, where the rent has risen from £1,607 to £1,846 over the 12-month period. The cheapest region is northeast England, where the monthly rent for a house has risen from £547 to £588.
Wales offers the cheapest overall rent of the home nations, as tenants pay an average of £752 a month for a house – up from £702 in July 2021. In Northern Ireland, the average monthly rent has gone up from £547 to £754. In Scotland, renting a house has gone up from £738 to £812 a month over the past 12 months.
Rent freeze for Wales?
While there’s no official word on a rent freeze for Wales, landlords are increasingly concerned by calls from Plaid Cymru to try and persuade the Welsh Government to introduce the legislation.
The leader of Plaid Cymru, Adam Price, says this winter could be “the hardest on record” due to increasing costs. He says the Scottish government has already acted, while in Wales, they are still “gathering evidence”.
His calls are backed by the homeless charity, Shelter Cymru, which believes a rent freeze will have a “positive short-term impact”. Cardiff People’s Assembly is also calling for a rent freeze and eviction ban to be introduced until there is a comprehensive system of rent controls in place.
The Welsh Government has responded that a rent freeze could result in buy-to-let properties being withdrawn from the market by landlords. Wales’ First Minister Mark Drakeford said he was opposed to the policy, because it could result in a collapse in the number of properties available in the private rented sector.
Landlords of furnished properties who are aiming to save money may consider using the services of a furniture pack supplier, so they can buy all their items under one roof and not have the hassle of transporting and fitting it themselves.
Research published by Property 118 shows using the services of a professional furniture pack supplier can reduce costs by up to 50% when compared with shopping around on the high street for individual items.