The market has seen a significant surge in rental prices, with averages outside of London climbing to an unprecedented £1,314 per month, according to the latest data from Rightmove. This marks a substantial 7% increase compared to last year. Conversely, within London, the average rental cost has escalated to £2,661 per month, reflecting a 4% rise from the previous year.

Notably, this upward trend in rental prices is accelerating more rapidly outside the capital. The average rent outside of London has risen by 7%, while in the first quarter, Rightmove’s data pinpointed the capital's rental prices reaching a record-breaking £2,633 per month. Outside London, the average hit £1,291.

Richard Lane, chief client officer at StepChange, remarked, “These figures show that the private rented sector is not working as it should for millions of tenants. We need the new government to act quickly to bring in reforms that strengthen protections for those who are struggling. It was encouraging to see a new Renters’ Rights Bill introduced in last week’s King’s Speech, as the majority of people we see seeking help with problem debt live in the PRS, so it’s a sector that desperately needs reform.”

Lane underscored the financial vulnerability of numerous tenants, stressing, “Our research shows that many tenants’ financial situations are becoming increasingly precarious – one in three (31%) private renters has used credit to afford their rent in the past year, while one in two (50%) private renters is finding it difficult to keep up with bills and credit commitments.”

He further elaborated on the necessity of safeguarding renters from eviction during financial hardships, emphasizing, “To protect renters from eviction when they fall on hard times, we need to ensure that financial difficulties don’t leave tenants at risk of losing their homes. That is why we welcome the new government’s commitment to ending Section 21 ‘no fault’ evictions, but reforms to grounds for possession need to have security of tenure at their heart, avoiding loopholes that could lead to backdoor evictions.”

Lane added a note of reassurance, saying, “For those facing rental arrears or financial difficulty, there is specialist support out there for you. A debt advice charity like StepChange can work through your budget and assess where you can make savings to pay towards your rent, which is considered a priority debt.”

In summary, the soaring rents, both within and outside of London, highlight a growing crisis in the private rental sector. The pressing need for reform is evident, as many tenants are pushed into precarious financial situations, often resorting to credit to manage their housing costs. The introduction of the Renters’ Rights Bill offers a glimmer of hope, but its implementation will be crucial in determining whether it can effectively address the issues at hand.