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Calls for more house building as annual rents rise faster than earnings
Zoopla says supply of rented homes has not risen since 2016 yet demand has grown, fuelled by the prohibitive cost of buying a home, with rents rising faster than salaries
Generation Rent says Renters’ Rights Bill is a good start but government must halt rising rents and unfreeze the Local Housing Allowance rate to protect families on low incomes
Annual rents have risen by an average or £3,240 in three years, according to the Zoopla Rental Market Report for December 2024, with the fastest increases taking place in the more affordable areas of the UK.
Rental inflation ranged from a high of 10.5% in Northern Ireland to a low of 1.3% in London over the previous 12 months, with an average growth of 3.9%, which is the lowest rate for three years.
Richard Donnell, Executive Director at Zoopla, said: “Private renters moving home are facing rents rising faster than earnings. The number of rented homes hasn’t grown since 2016, creating scarcity for renters at a time when demand has boomed on a strong labour market and the rising cost of home ownership.”
Angharad Trueman, President of ARLA Propertymark, the membership body for property agents, said: “There is still much work that needs to be done to ensure that the private rental sector can deliver stability for both landlords and tenants.
“The Renters’ Rights Bill that is currently being debated in Parliament, which will pave the way for the biggest overhaul in regulations for the rental market in more than 30 years, must provide fairness and balance for all involved.
“This ideally should include revisiting tax structures and regulations that are deterring long term investment in the private rental market.”
“What tenants need is greater choice. That means encouraging and supporting the vast majority of responsible landlords to stay and continue to provide decent quality housing.”
However, Ben Beadle, Chief Executive of the National Residential Landlords Association (NRLA), argued that: “No amount of changing the rules about when landlords can sell will address the central problem in the rental market, namely a chronic shortage of homes to meet demand.
“What tenants need is greater choice. That means encouraging and supporting the vast majority of responsible landlords to stay and continue to provide decent quality housing.”
The Zoopla figures come as research from Shelter showed that at least 354,000 people in England, including 161,500 children, spent Christmas 2024 without a home – an increase of 14% in one year.
The charity blamed high private rents combined with inadequate housing benefit, rising evictions and a lack of genuinely affordable social homes.
Polly Neate, Chief Executive of Shelter, said: “Extortionate private rents combined with a dire lack of genuinely affordable social homes is trapping people in homelessness. Parents are spending sleepless nights worrying about their children growing up in cramped and often damaging temporary accommodation, as weeks and months turn into years without somewhere secure for them to call home.”
Ben Twomey, Chief Executive of Generation Rent, said: “The Renters’ Rights Bill is a good start in giving renters more protection from eviction, but there are very few measures in the Bill to give us the breathing space we need from the cost of renting.
“The government must slam the brakes on rising rents, while unfreezing the Local Housing Allowance rate will protect families on low incomes from poverty and homelessness.”
Susie Dye, Housing Lead at Trust for London Housing, added: “We are keen to see the Renters Rights Bill quickly become law and proper resources for local authorities to enforce the law and prevent homelessness. But, ultimately, what we need is to build social housing.”
