Short answer? Because letting agents profit from ramped up rents. If tenants refuse to pay and opt to move out, agents then charge for every part, every level, every transaction in the in the renter finding process, since they charge for references, holding fees, etc etc etc. Except in Scotland, where fees are banned.
So rents rise. They keep on rising. Or do they? I still think the problem is recording rents ‘asked for’ rather than rents achieved. Basically, some rentiers try it on, and letting agents are worse - they pull fantastical rents out of the ether. They make them up. These numbers then appear on internet sites, and become reported as the going rate.
Rents rise because rentiers still exercise their ‘right’ to rise rents whenever it suits them, and because nothing exists to rein in their excesses – no mechanism is available to control their greed. Where demand is high they charge what they wish. They see ludicrously inflated rents as beneficial to their eternal quest to be ‘debt free’ ‘mortgage free’ or simply rich Rich RICH and fervently believe this ambition is attainable. Tenants fall victim to this delusion, because they have their rents hiked to insure this. And if they can’t pay they’re described as losers.
Wise rentiers value longer tenancies and nurture relationships with their tenants because they realise that while letting agents insist rents should and must rise annually, owners lose more money with costly voids and under-occupation. Some agents even include automatic annual rises in rental agreements.
Rents rise because some people, especially small-scale buy-to-let rentiers, see rising rents as a good thing, much as they do house prices. They impose misery of rents rising every six months, as they can with impunity.
Now society is trapped in a groove, with property price rises viewed as good for the economy, despite evidence to the contrary. It’s odd, but even when people are saving hard to buy homes for their families and for their future, property rises are seen as universally an excellent thing. I now suspect that excessively elevated, ramped up rents are also seen cause for celebration.
Rents are not rising everywhere. They rise where supply is restricted, especially in London, and oddly Warwick. Where the world is sane, and housing is not inherently problematic, rents are not racing to the sky.
Rents are rising sixteen per cent per year. Social security does not reflect this – Local Housing Allowance rises at one per cent per year. So in places where homes are scarce, prices explode and benefits sink. Brilliant. This means that even rents in less desirable properties, euphemistically described as ‘affordable’ where people on no/low incomes rushed to live, become rare and prices rise.
Why do actual rents rise? That’s easy. Rents rise because they can. Because we let them. Because we are immune to the scandal. Because everybody, even the wonderful Shelter, oppose rent controls, although the notion is starting to gain popularity. The idea that people can just charge whatever they want for such an essential item is stupid, and damages us all.