Increasing numbers of renters have faced a rent rise, according to our latest renter survey, but evictions appear to have dipped in 2023.
Our survey also reveals the scale of bidding wars which the government is now aiming to outlaw through the Renters’ Rights Bill, and exposes the lack of trust tenants have in the deposit protection system.
The latest survey, which ran online between January and March 2024, had responses from 1021 people who were renting in the private sector.
Rent rises
We have asked private renters if they have faced a rent rise in the past 12 months in our surveys since 2022, and asked for a breakdown of the reasons they were given. The number who have faced a rent rise has risen from 50% in late 2022 to 67% in early 2024.
The most common reason given by landlords for a rent hike is “higher market rents”, affecting 20% of private renters – which, in our view, is not a valid reason to raise the rent. However, it is currently legal, and will remain legal under current government plans.
Cost of living has also increased as a reason that landlords give, as well as higher mortgage costs. Although the dramatic rise in interest rates in 2022 was predicted to fuel rent rises, this appears to have affected only a small share of landlords compared with other factors. It’s important to note that just 42% of landlords claim mortgage costs in their tax returns.
Evictions
About one in six respondents had faced an unwanted move in the previous year, down from one in five in summer 2023. Within this there was a drop in landlords using Section 21 or telling tenants to leave without a formal notice, with a rise in Section 8 (typically relating to rent arrears) and tenants moving out at the end of a fixed term. Once the Renters’ Rights Bill becomes law, there will no longer be fixed terms, so tenants won’t feel pressure to move out or renew after a year.
Bidding wars
The most dramatic trend since the pandemic has been the rise of bidding wars – where landlords or letting agents ask tenants to offer the most they can afford to secure a tenancy. One in five renters who moved in 2023-24 experienced this, compared with one in 40 who last moved in 2019 or earlier.
Mass viewings have also increased significantly, while being asked for a guarantor is more common than it has ever been. Intrusive practices like asking for CVs or photos were relatively common in the wake of the pandemic but appear to have declined more recently.
Deposits
In the latest survey we also asked some questions about deposits. It’s very common to hear anecdotes about poor treatment when the time comes for your landlord to return the deposit, so we wanted to put some numbers on them.
First we asked what happened at the end of the respondent’s last tenancy, and, while it was mostly positive, one in four renters faced deposit deductions that they felt were unreasonable, or just didn’t get it back. Of those, just one in five used their deposit protection scheme’s dispute process to try to recover what they were entitled to.
Of the 200 respondents who didn’t get a good initial outcome, but didn’t take it up with the scheme, we asked why they didn’t.
The response was mixed, but can be split into four main reasons:
- The most common individual reason was renters not understanding their rights, at 25%
- A common theme was landlord behaviour that either prevented renters from using the dispute process, or discouraged them from doing so. Threatening a larger deduction is a negotiating tactic that unscrupulous landlords know can work at a time when the tenant needs money back quickly. Failing to protect the deposit and refusing to use the dispute process means the tenant has to go to court to get redress.
- The most common theme can be categorised as a lack of confidence in the system, whether it’s not knowing how long a dispute will take, if it will be fair, or if you have enough evidence to win the case.
- Finally, 1 in 5 tenants felt that raising a dispute was not worth the money.
Of those renters who did use the dispute process, most got more money back than the landlord initially offered them, and only one in 10 lost money. Despite fears that the process is unfair, it does appear to be worthwhile in most cases, even if many tenants are still likely to be put off by the risks.
Even so, if the government and deposit schemes made changes that improved confidence in the deposit protection system, many more tenants would challenge unreasonable deductions, and win more of their money back.
The government is currently reviewing the deposit protection system. We believe improvements should include:
- Return deposits automatically if the landlord doesn’t respond to a refund request
- Require landlords to accept the dispute process if the tenant wants to use it
- Require any undisputed portion of a deposit to be returned immediately
- Penalise landlords for repeated exaggerated claims, to discourage threats of larger claims
- Allow direct communication between schemes and tenants, so the latter are clear on their rights
We have recently started a project funded by the Financial Fairness Trust to develop these ideas and persuade the government to improve the deposit protection system. Sign up here to get updates on our work.
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