What is behind the recent rise in rental evictions?

Tenant evictions are on the rise, with recent government statistics showing that the number of rental evictions has increased by 98% in a year. However, in the midst of a cost of living crisis and with rising rates causing landlords to increase rates, can we expect this number to increase further as more tenants become unable to afford their monthly rent?

Related topics:  Landlords,  Tenants,  Rent,  Evictions
Property | Reporter
20th March 2023
"These are uncertain times for the UK rental market, and landlords and tenants must work together to navigate the current climate"

According to a recent survey of over 1,000 UK landlords by Finbri, 51.05% of landlords stated that they have evicted tenants from their rental properties. And this figure is expected to rise.

Research from the homelessness charity Crisis in December 2022 suggested almost 1 million low-income households across Britain feared eviction in the coming months. This is supported by Finbri's UK Renters' Report discovering 46.25% of renters are Strongly concerned (15.18%) or Concerned (31.07%) about the security of staying in their property.

The Landlord report found that most evictions (47.55%) resulted from anti-social behaviour, 45.99% exercised 'break clause' before the end of the fixed term and 44.23% of evictions were due to rent not being paid.

Overall, this survey highlights the difficulties faced by both renters and landlords. The need for greater support for those struggling to pay their rent is clear, as well as stronger regulations in place to protect both parties.

How much have evictions increased?

According to recent government statistics, the number of rental evictions has increased by 98% in a year. A charity said this demonstrated the "devastating impact" of the cost of living issue on tenants.

The number of landlord-initiated repossessions reached 5,409 between 1 October and 31 December of last year - this figure is double what it was during the same time period in 2021.

Why is the number of evictions increasing?

The rising cost of rent, lack of affordable housing, and increasing poverty levels are some of the main reasons landlords have to evict tenants. Renters face financial difficulties due to job losses, wage cuts, and benefit changes.

Rent increases: As rates continue to rise and mortgage payments increase, some landlords feel they have no choice other than to increase the monthly rental costs for their tenants. 19.38% of UK renters have experienced unaffordable rent increases, and as more tenants can't afford their rent, evictions will continue to increase.

Additional increasing monthly costs:

Council tax: Many across the UK are set to experience a 5% hike in council tax in April, with an expected £100 a year on Band D properties.

Energy costs: According to the Office for National Statistics, in the 12 months leading up to January 2023, gas prices in the UK increased by 129.4%, and electricity costs increased by 66.7%, contributing significantly to the annual inflation rate. Three-quarters of adults (39%) said that the cost of fuel has gone up in the last month.

Landlords selling up: 44.66% of landlords intend to sell their investment properties if the base rate reaches 4.5% - with the lack of rental stock expected to decrease following the base rate increase.

The number of evictions is on the rise and the cost of living is making it increasingly difficult for renters to pay their rent. This means that landlords need to be aware of their rights and responsibilities when it comes to evicting tenants and that tenants should be aware of the support available to them if they are facing financial difficulties.

The government is taking action

The government is taking steps to help tenants and landlords during this difficult period. The Government introduced Universal Credit in 2013, which offers additional financial support to help people meet their rent payments (only for those eligible).

In addition, the 'Renters' Reform Bill' will be voted on before May 2023. The upcoming bill will look to help to protect renters from unfair evictions and give them more rights. The new rules provide tenants with a higher level of protection with restrictions on rent increases and stricter housing standards.

However, despite proposing significant changes that will significantly impact private landlords and their tenants, only 59.64% were aware of the upcoming bill.

Final thoughts

Whilst historically, anti-social behaviour has been the biggest reason for landlords evicting tenants, with increasing rates, more tenants are unable to pay their increasing monthly rent.

These are uncertain times for the UK rental market, and landlords and tenants must work together to navigate the current climate. Unaffordable rent increases the risk of eviction, but empty properties won't help landlords either. Whilst landlords and tenants haven't always been considered equals, it's clear that in today's housing market, their relationship is more symbiotic than ever before, with increasing costs and the looming threat of eviction, each party 100% requires the other to survive.

Stephen Clark, from property bridging finance broker Finbri, comments: “Increasing interest rates affecting buy-to-let mortgages, new legislation and recent tax changes all impact the profitability of private landlords. They're under significant pressure and will seek to cover the additional costs, with many feeling they have no other choice than to raise rents. But the pressure on renters is also intense.

"UK renters are fearing rent increases and the threat of eviction if they can't afford those increases. It's a tough climate for both renters and landlords right now.”

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