The Renters’ Rights Act’s passage at the beginning of May 2026 signals the possibility of a shift in how we approach the private rental sector in this country. No longer will landlords be able to evict tenants at whim through Section 21 ‘no fault’ evictions, alongside a host of other protections for tenants including guaranteed rent renewals, periodic tenancies, and more. These changes are the direct result of tireless organising by tenant unions, housing justice organisations, community groups, trade unions, and NGOs – the product of organised people coming together to create organised power.
But many of these changes are not radical transformations to the housing crisis, but processes that bring the UK in line with most other similar countries. And while there is cause for celebration of the renter power that went into the Act, the RRA does not allay the cost of living crisis that imperils renters. Renters can now challenge unreasonable rent rises by filing with the rent tribunals – and legally do not have to pay the increases during the process of the tribunal. This is a huge step, and at the LRU, our members have been putting together resources to support all renters to challenge rent rises and push for a fairer housing system, collectively.
However, on paper, the tribunal can only rule against rent rises that exceed market rent for the units in question – which provides meagre protection to working-class tenants and families in gentrifying neighbourhoods where rents are increasing rapidly and out of line with the incomes of longtime residents of the neighbourhood. One need only look at Hackney, Brixton, and Walthamstow to see who sets the market rent – landlords – and witness that this too can function as a form of violent social cleansing. Should tribunals get to determine who stays, based on who can pay at a market rate set largely by developers and speculation?
Already, we have seen members of the London Renters Union and their neighbours receive massive rent rises at the end of their contracts. Others face evictions under grounds still allowed under the RRA, such as if the landlord decides to sell up. It is our members who are the hardest-working, and the most vulnerable, who are facing the shortest end of the stick. What makes London a global city is its ability to create community for those at all income levels, from diverse backgrounds and cultures – we only lose if the city continues becoming a playground for the rich.
I witnessed this first-hand from 2019 till the current day. During the pandemic, I lived in Dalston with a group of friends, lucky to be able to pay for a room at a price that would now be unthinkable. The eviction moratorium at that time protected renters further. I had to leave that space for various reasons, and re-entered the housing market in London earlier this year. When house hunting recently, we were lucky to find a room for almost double the price from 2019. This is not a material increase in the quality of housing, or the immoveable whims of the market – this is profit. This experience is shared by tenants across LRU and beyond.
Other countries handle this differently. Across Europe, North America, and even Scotland, governments apply regulations to the amount that landlords can charge in rent across the board – not just to tenants who are able to offer the time, and fee, to challenge their increases. While fears abound about rent regulations decreasing supply or dissuading landlords from making repairs, recently-released research from IPPR, NEF, and JRF debunks this myth. And support for rent controls is massive across England – a recent housing demonstration for rent controls and safe, affordable council housing showed over 5000 people taking to the streets, making it the largest demonstration for housing justice in over a decade, and a massive show of unity in the housing movement. Tenant unions from across the country were joined by NGOs, trade unions, community groups, and everyday neighbours. Over 80 organisations endorsed this march, and continue to support rent controls across the board. A recent statement from Andrea Egan, the General Secretary of UNISON, emphasises that only rent regulations can protect the majority of workers represented by UNISON in their homes – workers without whom, huge swaths of the country and the city of London would cease to function. Renters across England want, and deserve, real affordable rents now – and rent controls can achieve this. This would alleviate stressors on the majority of renters who spend more than one third of their income on rent, fearing an upcoming rent rise and cutting back on essentials. And the recent rumour concerning Rachel Reeves’ support for a rent freeze shows that there is political will to push a real system of rent controls through. That’s why, at the London Renters Union, and with dozens of tenant organisations and community organisations across the country with Homes for Us and Homes for All, we’re fighting for a visionary system of rent control for all tenants, coupled with a demand for safe, affordable, accessible council homes. We believe that we should all fight for rent control – that it protects migrants, people of colour, trans and queer people, youth, the elderly, the disabled, and all those pushed to the fringes of society. This is a natural extension of our fight for housing justice through the Renters Rights Act; a normal and fairly uncontroversial system of protection in most countries; and a politically feasible – and winning – system here. The cost of living crisis, global wars and genocide, many voters’ loss of faith in Labour, alongside the rise of Reform, show that everyday people need real change. This is the moment for renters to contact their MPs and join a tenant union in their area to fight for the system change we need – starting with rent controls and measures for real affordability, long term.
It is becoming increasingly difficult for policymakers to ignore the affordability crisis in the private rented sector. In recent weeks, the media was awash with speculation that the Government was considering an emergency 12‑month rent freeze. While these reports were decisively shot down by the Government, the moment exposed both the severity of the crisis facing renters and the political urgency now attached to rising rents, as the cost‑of‑living squeeze is set to tighten further as a result of the war in Iran.
This speculation coincided with a concrete shift in how rents are regulated in England. Just days later, the Renters’ Rights Act came into force on 1st May. Behind the headline abolition of section 21 ‘no‑fault’ evictions, the Act also quietly reshapes how renters can challenge rent increases in the private rented sector.
An existing legal process allows renters to challenge unfair rent hikes by applying to the First-tier tribunal for a market rent determination. An independent panel assesses whether the landlord’s proposed rent reflects what the property could reasonably achieve on the open market. If the increase overshoots that benchmark, the tribunal will reduce the rent accordingly.
Before the Act, this process was fraught with risks. Renters challenging a rent increase could be hit with a retaliatory section 21 eviction, face a large backdated bill following a tribunal decision, or end up with the tribunal setting an even higher rent than the landlord had originally proposed. The Act removes these dangers, making the process far less risky for tenants and strengthening the tribunal as a safeguard against unfair rent increases.
At Z2K, we see first‑hand the difference that being able to exercise legal rights can make to someone’s financial security through our frontline advice and representation work. We also know that high housing costs sit at the heart of the UK’s poverty crisis. Our previous research with low-income renters in inner London showed that unaffordable rents are one of the strongest drivers of insecurity in the private rented sector.
That’s why, as the Renters’ Rights Act came into force, we wanted to understand how the rent tribunal system was working in practice before the reforms take effect at scale. The result was our new research report, No More Back Doors: Delivering New Renters’ Rights to Challenge Unfair Rent Increases, launched to coincide with the Act’s implementation.
What we found was striking. When renters challenge rent increases, the system delivers significant financial protection. On average, renters who take their case to the First‑tier Tribunal are £1,140 a year better off than if they had accepted their landlord’s proposed increase. That is a meaningful sum for any household, and a vital safeguard for those already struggling to make ends meet.
Success rates are high, too. Renters win in 71% of cases, suggesting that landlords – often assumed to have a firm grip on market values – are routinely over‑pricing their properties. In a small but significant number of cases (around 5%), the tribunal goes beyond blocking the increase and actually reduces the rent below the original level.
The tribunal also builds housing quality directly into the price renters are expected to pay. Market rent determinations don’t just look at local rents – they also look at the home in question, reducing rents where landlords have let standards slide. This isn’t a marginal feature of the system. Our research shows that property quality was considered in 77% of decisions, underlining how central this safeguard is, and how widespread poor standards are.
But while the system can be effective, it is barely being used at all. Just over 1,000 market rent determinations were made over a two‑year period, despite the private rented sector being home to 4.7 million households in England. The Act is unlikely to decisively change this: evidence from Scotland shows that relying on renters to bring individual cases allows many unreasonable rent increases to slip through unchecked.
Even when used, the tribunal does not always prevent hardship. In the average decision we reviewed, the tribunal granted a rent rise of £144 a month, an increase that many renters simply cannot afford. The system offers little protection against the risk of financial crisis or homelessness.
In the longer term, the Government has committed to creating a more modern and efficient new body to handle rent challenges. Done well, this could fix key tribunal weaknesses – shifting towards proactive enforcement, reducing reliance on renter‑led applications, and strengthening protections against hardship and homelessness. It could also improve on what works now by embedding clearer, more streamlined assessments of property conditions.
These reforms won’t solve the private renting affordability crisis on their own, with private renters still handing over an average 34% of their income in rent. But they are a meaningful step towards tackling the worst excesses of unreasonable rent hikes, and will be vital in ensuring that the abolition of section 21 and the Renters’ Rights Act as a whole are not fatally undermined. Turning these new protections into reality will require all of us to play our part in encouraging renters to make use of their new rights. Renters cannot afford for this opportunity to be missed.
For a significant number of young and low-income people housing affordability is getting worse. Housing affordability, or the lack thereof, is a concept widely understood by those living in the United Kingdom. Or is it?
On 8th July 2020, a ground-breaking new book was published by Bristol University Press. ‘Understanding Affordability: The Economics of Housing Markets’, by Professor Geoffrey Meen (Reading University) and Professor Christine Whitehead (LSE). The book sets out to unpick the complex forces exacerbating the endemic unaffordability of UK Housing. Thankfully, it offers insight and recommendations to improve our country’s dire situation.
Using ‘price-to-earning’ ratios and ‘housing expenditure’ indicators are not the right approach
When discussing housing affordability we often use ‘price-to-earnings’ ratios. Although questions remain about whether this metric is even at all suitable. This is because affordable ‘for whom’ is a question consisting of several interrelated elements, which beyond price should include physical adequacy and overcrowding.
Some argue that using such metrics will not produce any significant improvement in affordability. This is primarily because social norms and demand-side behaviours we find play a crucial role in price determination. We must recognise demand remains a key factor in determining housing affordability.
Meen and Whitehead argue that looking at expenditure indicators alone can be highly misleading. Affordability concepts have their roots in 19th century studies of household budgets. For example, at the turn of the century the USA used the 25 per cent rule of thumb for affordability. This was based on one week’s pay for one week’s rent. Rules like this have informed both mortgage lending and housing policy alike.
More sophisticated approaches using the ‘Lorenz Curve’ tell us more about affordability
The book claims that more complex approaches recommended in academic literature have often been overlooked. This is particularly prevalent in housing policy arena and contemporary political discourse.
“We all know that this country does not have enough homes… the median house price in England is eight times higher than median gross annual earnings; in London, it is 12.3 times higher”
Minister for Housing, Christopher Pincher MP – March 2020
Source: Hansard
Price-to-earnings ratios sadly provide no information on the distribution of outcomes across household types and income levels. The authors are critical of how such flawed basic measures make it into planning policies. For this reason they say it is “worrying that it is still widely used”. Housing expenditure indicators such as rents and mortgage payments relative to incomes are also heavily criticised.
Ratios for example cannot distinguish between households with different income levels adequately. Are these metrics providing us with useful information to make meaningful policy recommendations? They suggest not. It is the distribution of incomes and wealth relative to the distribution of house prices that determines who can afford what. Not metrics that make use of averages such as the price-to-earnings ratio.
Research on affordability undertaken in the first chapter estimated affordability for First Time Buyers (FTBs). In it the authors based their research on variations of a ‘Lorenz Curve’. This approach uses a graphical distribution of the equality of affordability, which easily shows what proportion of FTBs can afford what proportion of housing stock. A quick look on Hansard results in not a single reference to such terminology in the past 10 years.
Measures of inequality still require closer attention despite painting a clearer picture
Research in the book suggests the use of a Gini coefficient to account for regional inequality. This is an index that measures inequality created by Italian statistician Corrado Gini. We can compare how distribution of income in a society compares with another if everyone earned the same amount. A Gini coefficient of zero means everybody is equal. If we measure a Gini coefficient of 1 it shows a single person earning all the income.
Despite being technically sound, using Gini coefficient’s is still criticised by some. Summer and Cobham argue that it does not adequately capture changes in the top 10% of the income distribution, nor the bottom 40%. In turn, due to the under sensitivity of the measure at the extremes, they consider the Palma ratio more suitable. For example, if the richest 10% have five times more income than that of the bottom 40% then the Palma ratio would be 5.
When undertaking a more rigorous analytical approach we find housing affordability issues persist across the country, even in the North East
The Gini coefficient in the South East is 0.70, thus displaying a high degree of inequality. In this region a household with a median income would be unable to afford to purchase a property without paying more than 30% of their income on housing costs. There are no surprises there, but it does highlight where housing affordability is most acute.
By comparison existing homeowners who wish to move, even those in the lower income ranges, could afford to move to higher value properties without paying more than 30%. Some people in this group are effectively able to make hay much easier than those without accumulated equity.
On this more complex indicator, the research shows that to afford a property in the first decile (lowest 10%) of property prices in the South East, you still would need to earn over the median income. The difference between the ‘haves’ and the ‘have nots’ is demonstrably clearer when using such methods.
Yet in the North East, where inequality is much lower considering its Gini coefficient of 0.30, there are still significant proportions of households who cannot afford to buy properties in the lowest decile. This means that after considering the full distribution of incomes, rather than just averages, affordability for FTBs is not just a problem for the South of England.
Forward thinking Local Authorities should be reflecting on these new affordability indicators to assess the distributional consequences of policy changes. A key takeaway is to recognise that housing affordability is not just a South of England phenomenon.
When determining housing policy we need to better understand demand-side factors
The book reflects international comparisons of the average annual growth in real house prices between 1970 to 2015. Over this period Germany had -0.3% growth in house prices while the UK had more than +3.5%. Yet looking at the comparison relative to wages suggests there is more than meets the eye. In this context house price growth in Germany was -1.9%, while in the UK +1.3%.
Since 1970, German housing stock growth relative to incomes has proven relatively constant, suggesting supply is less of an issue. We think this because even after factoring in incomes relative house prices were even lower. This is despite the rate of growth in housing stock remaining constant.
In the UK levels of growth in housing stock relative to incomes have fallen by around 1.5% per annum. This means wages have been outpacing growth in housing stock. From a fundamental economic standpoint, it is no wonder house price growth has been going one way. Clearly we must acknowledge that worsening affordability and rises in real prices in the UK relative to Germany are as much a result of demand-side factors, as it is a lack of supply.
The British psyche of wanting to own one’s own home may play a pivotal role in explaining why we may have had different house price growth to that found in Germany. Our willingness to spend more on housing costs as our incomes increase, perhaps to achieve social norms such as home ownership, is alluded to as an explanatory factor.
The nature of UK housing demand means prices respond quickly to growth in incomes
Low-interest rates can exacerbate housing market price volatility. But it does not explain the long-run trend of increasing price-to-earnings ratios. Historically the UK’s housing stock has grown at a slower rate than income. Professor Meen and Professor Whitehead argue that price-to-earnings ratios can only be constant over the long-run if household incomes grow at the same rate as growth in housing stock.
We must acknowledge that we have a stronger responsiveness to demand pressures in the UK, than in say Germany. Understanding this can help us deconstruct some of the price drivers behind making affordability worse. It is difficult to tackle the issue of affordability with supply alone when the demand impact from incomes is so strong. As a result the UK is prone to faster deterioration of affordability.
Understanding this is a key factors of the counterargument to Ian Mulheirn’s claim there is no housing shortage. Mulheirn’s own paper had a peer review by this book’s author, namely Professor Geoff Meen. In the peer review he explained that it is neither population nor the number of households that affects demand; rather demand needs backing by income to impact house prices.
Surprisingly, Ian’s claims still seem to be gaining traction, most recently by Stephen Bush, who has become “increasingly persuaded” by Mulheirn’s claim that supply has not contributed to the growth in price-to-earnings ratio since the 1990s.
Conventional wisdom is that rises in real house prices reflect a shortage of homes and that the current planning system plays a significant role. The book also demonstrates that increases in housing supply can improve affordability, but that changes need to be large and sustained to produce a noticeable effect. They also acknowledge that a general expansion in private supply does not necessarily filter down to those on low incomes.
The UK demand drivers see income growth translate into higher prices more readily
Fundamentally Meen and Whitehead argue that income growth (and its distribution) reflects demand, whereas housing stock reflects supply and is affected by conditions and policy in land markets. Meen and Whitehead reaffirm that in making such statements, demand must be backed up by income to influence house prices.
In the UK, the demand drivers see income growth translate into higher demand for housing services, which is more likely to translate into owner occupation. This is a sector where the quality of housing stock is generally higher than in the private rented sector.
The book does not deny the unassailable fact we need more funding for social housing. But also acknowledges the total supply of land for housing has been severely restricted. This has led to increased land values off the back of strong demand-determined increases in house price, exacerbated, of course, by easy credit. It is after all the trend which investors and developers have followed all along.
We need to re-calibrate the balance of concerns when discussing supply, demand, and characteristics of investment behaviour
Some have pointed to investor behaviour, low cost of capital, and attitudes of housing being an investment asset as causes of our problems. However, while there is no doubt these have contributed to the trends in price in recent years, research in the book demonstrates that this alone cannot account for the strong growth rate of 3.5% per annum since 1969.
We must accept that rising real house prices are not only a question of supply and investment demand but that it is also very much related to consumption demand.
To stress the point, the authors do not say that supply and investment characteristics are unimportant, rather that there has been a distortion of the balance of concerns. We cannot say it is just supply, or solely interest rates, which has led to this crisis of affordability. Thus, whenever we are framing the narrative, we must not forget to consider demand.
If we keep this in mind when looking to use more sophisticated ways of measuring affordability, while avoiding shallow rule-of-thumb metrics, we may be able to truly understand exactly who in our housing market is being failed by Government. Only then will we be able to devise policy to address it.
Chris Worrall
Editor of Red Brick. He currently works in land acquisition for Guild Living. Chris currently sits as a Non-Executive Director of Housing for Women and is a member of the Labour Housing Group Executive Committee.
Previously Investment and Finance Manager at both Quintain and Thor Equities. Chris has expertise in developing new residential investment strategies, real estate development finance, and the investment and development of affordable housing. He writes in a personal capacity.
As we enter the worst recession in 300 years, renters’ incomes will be squeezed with chances of meaningful wage-increases remote for most. As such, all concerned with safeguarding and improving renters’ quality of life should turn their attention to minimising the cost of living where possible.
Given housing costs are renters’ greatest expense, how rent is determined should be scrutinised closely with rent reduced as much as possible. In addition to benefiting renters as individuals, reductions in rent would serve to fortify aggregate demand during the recession1.
Competing definitions of affordability
In 2011, the coalition government introduced a definition of affordability which provided a rented property would be classified as ‘affordable’ if it cost no more than 80% of the local market rent.
The definition was absurd.
It is impossible to calculate whether something is affordable if the formula you use takes no account of the renter’s income and essential outgoings. In response, various well-intentioned actors, including the Labour Party came up with their own definitions² of affordability focusing on renters’ income and ability to pay.
The limitations of a focus on ‘affordability’
Any suggestion that market forces should not be the sole determinant of renters’ housing costs should be broadly welcomed. However, limiting demands around housing costs solely to those of ‘affordability’ has served to tacitly legitimate the landlord and renter relationship, a relationship that is, at its core, inherently exploitative.
The principle that landlords should profiteer from renters has become locked-in as ‘something that goes without saying’, all calls for affordability demand are that landlords’ profiteering should not be so great as to cause renters excessive hardship. Crucially, a focus on ‘affordability’ for the renter has meant the landlord’s side of the relationship has avoided scrutiny.
Scrutiny of how landlords justify the rent they charge exposes the inherent unfairness of the landlord and renter relationship
1) ‘Supply and demand’ might explain rent levels, but explanation does not equal justification!
Housing costs for renters should be based on the actual cost of supplying the home, not what the market can bear. Sometimes, because of the layout of the plumbing in certain properties, it is impossible for water companies to provide individual water bills for each household. When this is the case, the landlord of the building will receive one water bill for the entire property and then invoice each household for their portion of the bill.
It is unlawful for landlords to make a profit from the re-sale of water in such circumstances as it is recognised it would be morally abhorrent to profiteer from something so necessary to human survival when the water company has already done so.
Given shelter’s own importance to human survival and given that everyone involved in the construction of the home has already been paid for their work and materials, there is no compelling reason why re-sale of shelter should be treated differently.
2) Landlords’ costs of supplying a home, outside of initial acquisition, are negligible compared to the rent they charrge.
45% of landlords own their renters’ homes outright without a mortgage. For such landlords, the ongoing cost of supplying a property to a renter is limited to the costs incurred keeping the property in a good state of repair and fit for human habitation (£73.17 per month on average for a three bedroom home).In comparison, the average rent on a three-bedroom home in Manchester is £895.00 per month.
3) It is unfair for landlords to expect renters to cover the cost of initial acquisition of the home through their rent, unless ownership is transferred in exchange!
As an alternative to pointing to the free market price mechanism, landlords sometimes use their Mortgage CMIs as justification for the rent they charge. It is unfair for them to do so. If landlords want somebody else, i.e. renters, to cover their costs in acquiring ownership of the home, as a basic point of fairness, ownership of the home should be transferred to the ones doing the actual paying in exchange.
Currently, landlords have their cake and eat it, at the renter’s expense.
Moving beyond affordability
If challenges to housing costs focus solely on ‘affordability’ a systematic investigation of landlordism, and subsequent exploration of pathways that could lead to greatly reduced housing costs for renters, such as nationalisation of the private rented sector, become foreclosed.
It is unclear why, historically, supposedly progressive actors have been content only to ask for ‘affordability’ on behalf of renters. There may have been a lack of courage in challenging landlordism head on, or perhaps a latent ‘protestant work ethic’ type notion that it is virtuous for housing costs to be at least a bit of a burden for renters.
Whatever the historic reasons, we are now in extraordinary times, merely asking for affordability is not good enough.
