Yet another blow for ‘generation rent’ as post-pandemic normality resumes

Renters face paying nearly £500 more per year than they did 12 months ago, according to new data. James Moore asks: is there not so much as a glimmer of light for those caught in the unpleasant financial bind created by the UK’s housing crisis?

Generation rent is in for more hard times as the market turns across Britain (Getty/iStock)

House prices continued their relentless northward march through the pandemic, with more than a little nudge from government policy, but there was at least some relief for renters.

The bills moved in the opposite direction for the latter, especially in urban areas. So did the proportion of their income renters spent on accommodation.

This offered some rare welcome news for “generation rent”, which for too long has been on the wrong side of government policy and is now being asked to shell out to “fix” social care too.

Unfortunately, the brief respite offered by falling rents is coming to an end. In most of Britain it has already ended and moved sharply in the other direction, as this morning’s rental report from property website Zoopla makes clear.

UK rents outside London are now rising at a 5 per cent clip year on year, the fastest rate in over a decade. With the average bill coming in at £790 per calendar month, up from £752 a year ago, the typical renter is paying £456 more per year. Nearly a third of their income is earmarked for accommodation.

Rents in Manchester, Reading and Leeds are now rising again, after having eased off during the pandemic. But it is the figures from smaller towns and cities that are truly remarkable.

Rents in Hastings grew at an annual rate of 9.9 per cent for the year to July; in Mansfield the figure came in at 10 per cent. It was 10.5 per cent in Wigan.

The sort of places putting in those sort of numbers usually start from a lower base, ranking among the more affordable places to live in the UK, but that is changing at an uncomfortable speed, one that far outstrips any rise in income.

London, where prices are still falling, remains an anomaly. But the pace of decline has markedly slowed, to 3.8 per cent year on year in July compared with the 9.4 per cent fall recorded in January.

It probably won’t be too long before young renters in the capital are having their economic legs cut off along with their peers. Coupled with that national insurance increase for social care? Protests, even riots, have been sparked by less.

Problems in the housing market generally look set to be exacerbated as a result of Boris Johnson’s dismal Brexit, which a sizeable majority of them opposed, and the aftershocks from it.

The supply chain crisis it has sparked led building supply merchant Jewson to warn that the price of goods ranging from timber, to wheelbarrows, to insulation, to adhesives, is going to rise sharply this month, perhaps by as much as a fifth.

The big housebuilders could afford to absorb that. Their profits have been stunning. Their shareholders have enjoyed a five-star service.

But they’ll likely seek to pass it on because they can.

All doom and gloom for both renters and those attempting to scrimp and save for a deposit so they can buy then? Is there not so much as a glimmer of light?

Well, they have the capacity to create one. Those caught in the unpleasant financial bind created by the UK’s housing crisis – and figures like Zoopla’s demonstrate why that word is by no means over-egging it – can exert some measure of revenge on the ultimate authors of their misfortune through the ballot box.

It’s hardly an original point to make, but there is a reason why young renters, or would-be buyers, so regularly find themselves on the receiving end of economic brickbats like this: they don’t vote. Or at least, they don’t vote in sufficient numbers for politicians to pay proper attention to the problems they face.

The current, morally indefensible, situation might start to be addressed if that changes.