Addressing Rental Affordability

If you are looking for a property to rent, or are already an existing tenant, then you will be well aware of the current challenges within the market as rental prices continue to reach record highs.

Rents continue to outpace earnings, leaving rental affordability in its worst state for more than a decade. Understanding what you can do to address rental affordability with strategies that will help you cope with this rising market is essential.

Here are a few things to consider: 

It may feel like your landlord has the advantage since they are the ones who will be receiving these increased rents. But the current situation is caused by demand outstripping supply and landlord costs have also increased. Rising interest rates may also lead to higher mortgage rates on any properties they own – be they rental or their own homes. For some landlords, the rent they charge may only just cover their actual mortgage payments. They will want to avoid rent arrears as much as you do.

If you are looking to secure a new rental property, look to negotiate. It may be that for the security of a longer-term tenancy, or for you offering to decorate, a landlord may consider reducing the rent slightly. If you are already renting and facing a rent rise, be assured that rent rises should be fair -  generally in line with inflation and you can dispute them if they aren’t.

Equally, if you are having financial problems or falling into rent arrears at any point during a tenancy, then speak to your landlord early on to see if they can help. The more notice you can give them the more likely they are to be able to help. Rent arrears could lead to eviction and a bad reference from your landlord which will make finding your next property difficult so it’s in everyone’s best interests; therefore, to be open and honest. 

Sadly, the pressures within the rental market aren’t about to ease anytime soon; however, short-term leases may put you at greater risk of being exposed to the vagaries of the sector. One solution is to look for and agree on longer-term leases through your letting agent or with landlords directly. As well as possibly enabling a lower monthly rent it also means additional security for both you and your landlord. 

Other potential ways to reduce costs is to downsize what you are looking for, or explore the possibility of sharing with other renters, perhaps in an HMO. Although you may lose out on personal space it could be the buffer you need, especially with rents for new lettings continuing to outpace an expected earnings growth rate of 3.6% in 2024. 

It might be that the challenge of paying your rent is further exacerbated by a change of circumstances which has affected your income. If this means you are struggling then you may be able to claim benefits to help pay your rent.

One option is the housing element of Universal Credit. However, if you are living in private rented housing it might not cover all your housing costs. If this is the case it may be that you can claim a Discretionary Housing Payment (DHP) from your local council to cover the rent shortfall. You need to have received your first Universal Credit payment and are also able to claim DHP even if you are already claiming Housing Benefit. Organisations such as Shelter and Citizens Advice can provide additional advice. 

The challenges of the market are certainly heightened by intense competition. But when looking at renting, ensure you carefully consider what you can actually afford, rather than getting carried away chasing something that you can’t.

Landlords and lettings agents often run affordability checks as part of their tenant referencing and screening process. Keeping within your means is essential.

HomeLet is one of the UK’s largest tenant referencing providers and has referenced more than 13 million tenants over the past 30 years. Our referencing products are available to all letting agents who work in partnership with the business. HomeLet’s Landlord Insurance also helps to protect your property and investment.