"Reviving a proven system that was in place for over 70 years, but redesigned for the 21st century, would make life more affordable for private renters across the whole country"
- Molly Harris - New Economics Foundation
Private rents are rising between 6% and 9% every year in every region of England, with the affordability crisis now a "national phenomenon," according to new research from the New Economics Foundation (NEF).
The report finds that the lowest-income renters are spending just under half their income, 48.5%, on rent, and warns that without further action, affordability will continue to worsen across the country.
"No matter who you are, living in an affordable, secure home is the foundation of a good life," said Molly Harris, senior researcher at the New Economics Foundation. "But private renters are often pushed into overpriced and substandard homes.
"The Renters' Rights Act is a valuable step forward in making private renting safer and fairer – but it doesn't address the UK's problem of runaway rents.
"Reviving a proven system that was in place for over 70 years, but redesigned for the 21st century, would make life more affordable for private renters across the whole country."
The research acknowledges the Renters' Rights Act, which came into force this month, as a vital step forward in protecting tenants from unfair evictions, but argues it won't alone solve the problem of unaffordable rents.
Before the pandemic, rent rises were modest and varied by region, from around 1% in the north-east to just over 3% in the east of England. The picture has since shifted sharply, with all regions now growing between 6% and 9%, and the three fastest-growing rental markets all located in north-west towns.
The report traces the roots of the crisis to decades of policy decisions, including the removal of rent controls, the sale of social homes through right to buy, and the introduction of buy-to-let mortgages. The consequences, it argues, extend beyond housing, with high rents transferring income from renters, who are more likely to spend, to landlords, who are more likely to save or reinvest in assets, suppressing consumer demand and channelling billions in housing benefit to private landlords.
The NEF is proposing a comprehensive programme of reform combining immediate action with a longer-term structural framework. The key measures include:
An immediate "emergency brake" temporarily capping rent rises, both within and between tenancies, at either the rate of inflation or 2%, whichever is lower.
New powers for mayoral combined authorities to declare local rent pressure zones and run "fair rent" pilots, with rent levels set by reference to local indices rather than uncapped market rents.
A phased introduction of fair rents in areas with runaway rents, designed to avoid market disruption or excessive churn in tenancies.
A temporary exemption for new-build properties from the emergency brake and fair-rent system, with a gradual phase-in over time.
The proposals draw on international evidence from France, Germany, Ireland, and Spain, all of which operate rent regulation systems. Rent controls in Paris have seen rents fall by between 3.7% and 4.2% on average, with no evidence of negative effects on rental market supply.
Public support for action is strong. A 2024 Ipsos MORI poll found 71% of the public supported capping annual rent rises at no more than the national inflation rate, with just 8% opposed. A separate YouGov survey for Common Wealth found 75% support for a quality and location-linked rent controls policy.
