Cost of renting reaches record high

The cost of renting for younger tenants has soared to a new record high.

Recent research shows rent costs for under-45s has risen by a staggering £3.5bn over the past year.

According to estate agents Hamptons, this age group now accounts for 66% of all rent in Britain.

That translates to a hefty £56.2bn in 2024 alone.

Why have rents surged?

The hike is largely due to landlords passing on increased mortgage costs.

Mortgages went up after the Bank of England raised interest rates throughout the inflation crisis.

Rent increases peaked in December 2023 at an annual rate of 10.2%, before dropping back to 2%.

Over the past decade, rent has increased by 71%, now exceeding £85bn in 2024.

More young renters

As potential young buyers get priced out of the housing market, the number of under-45s renting properties has jumped by nearly 150,000 in the last year.

The total now stands at 3.4m – the fastest rise in a decade.

Goodbye, help to buy

The spike also follows the winding down of the help to buy scheme in March 2023, which had supported about a third of first-time buyers over the last ten years.

As Aneisha Beveridge from Hamptons puts it: “Higher mortgage rates have clipped the wings of many young aspiring homeowners…

“Renters face saving for longer and earning more to borrow similar amounts of money to buy a home.”

Lower rents for older tenants

While younger generations are feeling the rent pinch, older tenants have seen their rent burden decrease by £700m to £29.1bn as fewer over-45s are renting.

Renters’ rights bill

The renters’ rights bill is set to be approved later this year. It will introduce several changes to the private rental market, such as:

• ending no fault evictions
• stopping bidding wars for rental properties
• limiting deposits to a maximum of six weeks' rent for new tenants

These reforms aim to make renting fairer for everyone.

If you’re struggling to pay your rent

As a tenant, it’s important to know your rights to avoid being exploited. 

Usually, your landlord can only raise your rent once a year, and the increase must be reasonable.

For more details on your rights and help if you're having trouble paying, check the government website.

Our blog on managing rising rents and mortgage rates also offers tips on saving money and support for mental health if financial stress is getting to you.