July 2022
By Anny Cullum, ACORN Policy Officer, & James Maloy, ACORN Executive Assistant
Contents
Introduction
Rent Increases
Paying more than a month’s rent in advance
‘Bidding Wars’
Displacement
Tenancy Fees
Deposits
Introduction
Our Private Renters Affordability Survey ran from the 11th - 26th of July 2022 and had 824 respondents.
ACORN undertook this survey to quantify the problems that private renters are increasingly coming to us with surrounding affordability. There have been a lot of discussions in government across both England and Wales regarding ways to reform the private rented sector, but policies to address spiralling rents, bidding wars and fierce competition for homes are conspicuous by their absence. Our survey looked at 6 key areas; rent increases within existing tenancies, displacement from a community due to high rents, tenants being encouraged to bid over the asking price for properties, prospective tenants being encouraged to pay several months in advance to secure a property, tenancy fees and tenancy deposits. The respondents were asked if they had had particular experiences since January 2021.
This report will cover the current laws affecting each area, our findings, and testimony from respondents. We have also given regional breakdowns of respondents' answers.
Rent Increases
The law: There are currently no laws setting how high rent can increase. There is a process called the First Tier Tribunal that tenants can apply to if they think their landlord has proposed an unreasonable rent increase, but the tribunal bases its decision on comparisons with the local market rent, and has told some tenants to pay over the increase originally proposed by the landlord. With no-fault evictions still hanging over tenants, many choose not to pursue this method for fear of being evicted in retaliation.
Our findings: 45.7% of respondents had had their rent increased since the beginning of 2021. The median increase was 7% and the mean was 10.5%. The highest increase reported was 67%.
“The Landlord puts the rents up every year because residents are pensioners whose pension rises with inflation, so we are never any better off.” - Stephen, Lewes
“Our rent was raised by 30% this year and we know it will be raised again in Jan (to £1500 pcm). We have been looking for a house that we can afford to rent as a group (4 friends in our 40s) but the HMO rules have made this almost impossible. Everyone we know who has successfully continued living in shared accommodation in central Bristol is having to illegally sublet. We are having to choose between moving to another city or moving several miles out of the city centre.” - Lisa, Bristol
“We were very lucky that our landlady understood our particular situation and wanted to avoid pricing us out of the house, as we have been here 3 years and made it our home, and have a number of factors which would make finding somewhere else very difficult. We were lucky that we were able to have active input into the new rent price. We know a lot of other landlords in the area have not been so understanding.” - anonymous, Leeds (rent increased by 27%)
“landlord has raised rent by over 15% this year but accepted the increase because moving to another property in our area wouldn't be affordable” - Helena, Manchester (17% rent increase)
Paying more than a month’s rent in advance
The law: Currently, there are no laws prohibiting asking tenants to pay several months rent in one go in advance. It is an offence not to rent to people receiving benefits as this is recognised as discrimination under the equalities act, as people with protected characteristics are more likely to claim benefits. Despite this, landlords and agents are still able to ask for large lump sum payments of rent in advance even though this is impossible to pay for many on low incomes or benefits.
Our findings: 86 out 824 respondents - 10.4% or over 1 in 10 - had been asked to pay more than one months rent in advance to secure a tenancy.
On average those who paid more than a month in advance paid 6 months in advance, and the average upfront cost of this was £4053.
“Taken to group viewing and said we would all have to blind bid. Encouraged to make offers to secure a property and pressured to do this quickly on various occasions from various different agencies” - Lucy Holmes, Liverpool (used to live in Brighton)
‘When looking for a new home we were asked to bid against other prospective tenants either by offering a higher rental payment or giving rent in advance. One letting agent advised us that 6 months rent (~£6k) would be necessary to win’- Anonymous, Manchester
“This practice destroyed our ability to seek a new home. It was generally around the £4800-£5200 mark for a suggested advance” - Denzil, Norwich
‘Bidding Wars’
The law: There are currently no laws preventing agents or landlords encouraging prospective tenants to bid over the asking rent to secure a property.
Our findings: 15.8% of respondents who answered this question said they had been encouraged to bid over the asking rent for a property. This practice was most prevalent in the South West and Greater London.
“I was repeatedly told that if I was hoping to secure a new flat I needed to ignore the asking rent and go in higher, or offer to pay the first 3-6 months up front.” - Naomi, Falmouth
“I attended an open viewing where the property went to the highest bidder.” - Frank, Manchester
“A letting agent encouraged us to over an extra £100-150 on the rent as there were over 20 other people interested in the property” - James, Bristol
Displacement
The law: There are currently no laws setting how high rent can increase, or how high you can set rent in any area when advertising a rental. There is a process called the First Tier Tribunal that tenants can apply to if they think their landlord has proposed an unreasonable rent increase, but the tribunal bases its decision on comparisons with the local market rent, and has told some tenants to pay over the increased originally proposed by the landlord. With no-fault evictions still hanging over tenants, many choose not to pursue this method for fear of being evicted in retaliation.
Our findings: 19% of people said they had to move away from a town/city or borough because they couldn’t afford the going rents. Bristol, Brighton and London were the most common places to have moved out of.
Natasha has had to move out of both London and Brighton due to costs and now lives in Canterbury, “We have had to move 4 times in 4 years with a 4 year old. We are constantly looking for a home and last year made 32 applications before being accepted due to being outbid.”
“I have moved out of Lambeth where my family live because I could not afford rent there. I also subsequently moved to Lewisham because I could no longer afford rent in Southwark.” - Aliyah, London
“We were evicted and forced to rent somewhere we couldn't afford to avoid us and our three children becoming homeless. It's completely unsustainable and we are moving to the Isle of Wight where rent is lower” - Anonymous, Shoreham by Sea
“I moved from Sheffield back to Norwich over the summer of 2021 to live with my parents for a couple of months while I looked for a property to remt in Sheffield. This turned into sixth months as I found it impossible to find anywhere to rent in my local area that wasn't a student let or charging an unlivable amount of rent. I've only been able to move back due to finding a very dodgy landlord who charged a much lower rent than what the average has become, and seems to have forgotten I exist (thankfully). In exchange I had to pay six months rent up front.” Anonymous
Tenancy Fees
The law: Charging most agency fees became illegal in 2019 but we are aware that some agencies have still been asking tenants to pay them. The only fees agents are allowed to charge are:
- a refundable holding deposit (to reserve a property) capped at no more than 1 week’s rent
- payments associated with early termination of the tenancy, when requested by the tenant
- payments capped at £50 (or reasonably incurred costs, if higher) for the variation, assignment or novation of a tenancy
- a default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement
Our findings: 48 out of 824 respondents - 5.8% paid illegal fees since the Tenancy Fees Act came into force in 2019. That’s over 1 in 20.
“I was threatened with fees if I didn't leave when evicted, but the agency has no power under which to charge such fees. Things such as charges for changing the locks, a daily fine for every day I remained in the flat after the 2 months since the section 21 was sent, etc.” - anonymous, Brighton
“Charged £250.00 to add a new tenant to the tenancy agreement!” - anonymous, Bristol
“Charged an extra week of rent to have a cat.” - Dave, Somerset
“Wear and tear £100 and deep clean another £100” - Paul, Liverpool
Deposits
The law: The Tenant Fees act also capped the amount a deposit can be to 5 weeks rent (or 6 weeks, if the total annual rent was more than £50,000). They can also charge a refundable holding deposit capped at 1 weeks rent to secure the property.
32 out of 824 respondents - 4% had paid an illegally high deposit since the Tenant Fees Act came into force in 2019.
Most of these people had deposits of 6 weeks rent/2 months rent, but others were asked to pay more because they had pets.
“I was charged £1038.46, which is 8% (£74.17) more than what would have been 5 weeks rent (rent inclusive of bills was £900 per month since May 2020, now £1000)” - anonymous, Brighton
“£1000 over what it should have been, this amount was eventually refunded after extensive efforts and took months to come through. Also no holding deposit I've ever paid to an agency has ever been refundable” - Lucy Holmes, Liverpool
“I was charged £800 rather than £525, and they tried to scam me out of the deposit at the end saying I left the place needing professional cleaning.” - Elizabeth, Yorkshire