Tenants choose to stay put despite renewal rents creeping up

The most recent Market Insight report from Hamptons reveals that tenants renewing their rental contracts have seen their payments increase by 8.3% on average over the last year. While open market rents have increased by just 6.4%.

Renewing tenants are now paying £1,158 on average.

But, despite the jump in renewal rates, it remains cheaper to stay put than move, with those relocating paying up to £178 more a month - an extra £2,135 a year.

Moving also means getting less home for more money which has led to the number of renters relocating falling to levels last seen during the pandemic.

According to the report, soaring rents have meant that the cost of a one-bedroom home is the same as renting a two-bedroom home 20 months ago. And the cost of a two-bedroom home has also leapt to the same level as a three-bedroom home 20 months ago.

Before the pandemic when rents tended to increase by 2-3% a year, it would have taken 50-70 months for the cost of renting a one-bedroom home to climb to that of a two-bedroom property.

UK rents are now at the highest rate on record.

But, in more positive news, there are signs that rises are slowing, with rents on new rental properties increasing by just 0.8% in the last month. And, in Central London rents decreased, which was also confirmed in a separate report by Chestertons, revealing London rental prices have dropped by up to 10% in some areas compared to last year.

Aneisha Beveridge, head of research at Hamptons, said: “Many tenants had enjoyed years of no or below-inflation rent increases, particularly when rents weren’t rising much on the open market and mortgage costs were falling. Landlords were often content with a small gap between the market rate for their home and what their tenant was paying. However, over the past few years, strong rental growth on the open market has meant that the gap between market rates and what some tenants were paying rose significantly.

“Tenants fortunate enough to be protected from higher rents by their landlords or longer contracts are increasingly seeing their rents rise. These increases for renewing tenants tend to be lower and stretched over a longer period than for newly let homes, often meaning tenants still pay below market rate. But, even so, these hikes can still add up to hundreds of pounds a month.”

Here’s some helpful information if your landlord increases your rent.

Can my landlord increase my rent?

Your landlord must follow certain rules if they want to increase your rent. These depend on the type of tenancy agreement you have.

If your tenancy agreement is on a rolling week-by-week or month-by-month basis, your landlord can only increase the rent once a year without your agreement.

If your tenancy is for a fixed term, you can only have your rent increased if you agree. If you don’t agree, the rent can only be increased when the fixed term ends.

How much can my landlord increase my rent?

Private landlords can increase your rent by as much as they like. There are no rent controls in place for private landlords.

If you’re a social housing tenant, the government has set a maximum rent increase. For 2024/25 that is 7.7% for most properties, meaning a maximum weekly rent of £188.04 for a one-bed property, increasing to £243.13 for six or more beds.

What can I do if I can’t afford my landlord’s rent increase?

Speak to your landlord if you can’t afford their suggested rent increase. They may be willing to negotiate if you’ve been a reliable tenant rather than risk losing you.

Before you speak to your landlord, do some research. Look at what similar properties in your area are going for and use this as evidence as to why your rent shouldn’t be increased by that much.

It’s also worth working out a budget so you have a good idea about what you can afford.

What if I can’t reach an agreement with my landlord?

If the rent increase is fair and in line with market values in your area but still unaffordable, you could see if you can get help to pay your rent. If you’re on a low income or get benefits you might be entitled to housing benefits or housing costs payments through universal credit. You might also be eligible for council tax discounts, or social tariffs.

But, a word of warning – if you choose to move out of a home that could have been affordable, you might not be entitled to any help from your local council.

What will happen if I don’t pay my rent increase?

If you aren’t able to or choose not to pay your rent, your landlord could evict you.