Private rents across the UK have begun accelerating again after a three-year slowdown, with tenants warned that increases could reach 4 percent or 5 percent by the end of the year.
The average rent advertised for a new tenancy was 2.6 percent higher in July than a year earlier, according to property website Zoopla. Annual growth had fallen as low as 1.6 percent in February before beginning to climb again.
The immediate cause is greater competition between tenants. Zoopla said 3 percent fewer privately rented homes were available than a year ago, while each advertised property now receives more than five enquiries on average. That remains below the queues seen after the pandemic but represents the most intense competition for nearly two years.
Higher mortgage rates are also keeping would-be first-time buyers in rented accommodation. Workers who can’t afford the inflated price of buying a home are left competing over a shrinking number of private tenancies instead.
Demand was particularly intense in London, although rents were rising across the country. Zoopla said the amount landlords could extract still depended on how much tenants in each area had left to surrender.
“In less expensive areas, renters have more capacity to absorb rent rises before hitting an affordability ceiling, whereas in the most expensive areas, rents are already stretching what renters can pay, capping how much further rents can increase,” the report said.
This “affordability ceiling” isn’t a point at which rent becomes comfortably affordable. It is the point at which landlords have taken about as much as tenants can pay without becoming unable to sustain the tenancy at all.
Under capitalism, access to housing isn’t organised according to need. Homes and land are property, giving their owners the legal power to demand payment from those who need somewhere to live. Scarcity strengthens that power by forcing several prospective tenants to compete for each available property.
“Our latest report shows how sensitive the rental market is to even modest changes in how many homes are available for rent,” said Richard Donnell, executive director at Zoopla.
“Growing the number of homes for rent through increased investment is the most sustainable route to boosting choice for renters and ensuring stability in rent levels over the long run.”
Supply plainly matters. What Zoopla leaves unspoken is who should own and supply those homes. “Increased investment” is presented as synonymous with encouraging more landlords to enter the market, as if private ownership were the only possible source of rented housing.
Under this model, additional homes appear only when investors expect an adequate return. The landlord’s need for profit comes first; the tenant’s need for shelter can be met only when doing so is sufficiently lucrative. If borrowing, taxation, maintenance or regulatory costs reduce the expected return, investors can take their capital elsewhere and leave tenants fighting over what remains.
Zoopla said investment by landlords remained “still muted as a result of higher costs and more regulation”. This framing treats regulations protecting tenants as an obstacle to the proper functioning of the market. The landlord’s return is taken as the starting point, while the tenant’s need for secure and affordable shelter is made dependent upon it.
But private landlords aren’t the only possible suppliers of rented housing. Britain has previously built homes directly through the public sector. In England, local authorities completed around 155,000 homes in 1967. By the early 1990s, council construction had fallen below 1,000 homes a year. The highest overall rates of housebuilding in the postwar period were achieved when councils were building at scale, not when the state left supply to property investors.
The destruction of council housing was a political project. Right to Buy transferred public homes into private ownership while restrictions on councils prevented anything approaching one-for-one replacement. More than 2 million homes were sold through Right to Buy in England between 1980 and March 2023.
The total number of homes let by councils and housing associations fell from 5.5 million in 1979 to 4.1 million in 2022. This happened while both the population and number of households were increasing. The private rental sector then expanded into the space created by the retreat of public provision.
New Labour left the basic settlement intact. It retained Right to Buy and kept councils marginalised as housebuilders. Between 1997 and 2010, England’s stock of socially rented homes fell by around 420,000. Housing associations continued to provide some new homes, but council construction accounted for less than 1 percent of total housing completions during the years before 2010.
The Conservative-Liberal Democrat coalition deepened this market dependence after 2010. It imposed borrowing caps on council housing departments and introduced “Affordable Rent”, allowing rents to be set at as much as 80 percent of the local market rate.
This enabled ministers to boast about the number of “affordable homes” being delivered while diverting funding away from genuinely low-rent housing. The official category also includes shared ownership and other subsidised routes into private ownership, so it can’t be treated as another name for council housing or social rent.
Before 2011, most new homes classified as affordable were provided for social rent, generally set at around half the market rate. By 2022-23, social rent accounted for just 15 percent of new affordable housing. England’s stock of social-rent homes fell from approximately 4 million in 2013 to 3.8 million in 2023.
The Renters’ Rights Act, which came into force in England at the beginning of May, has changed some of the rules governing private tenancies. It was described as the largest shake-up of the sector in more than 30 years.
Those protections may restrain some of the worst abuses, but they don’t alter the basic property relationship. One class still owns the homes while another must surrender part of its wages for permission to live in them. Nor can stronger tenancy rights substitute for providing a large stock of publicly owned housing outside the private market.
The present Labour government has announced more money for social housing than its Conservative predecessors, but its plans still fall far short of restoring mass public construction. Its £39bn Social and Affordable Homes Programme is expected to provide around 300,000 homes in England over ten years, with approximately 180,000 intended for social rent.
That amounts to an average of 18,000 social-rent homes a year if the entire programme is delivered. The Housing, Communities and Local Government Committee previously endorsed evidence that England needed at least 90,000 net additions annually. Labour’s promised programme would therefore provide social-rent homes at only one-fifth of the required rate, even before subsequent sales, demolitions and conversions are deducted.
Nor is the programme dedicated to council ownership. Its target concerns the rent charged rather than who owns the homes. Councils, housing associations, for-profit registered providers, housebuilders and developers can all receive funding. Of the 33 organisations awarded the first long-term strategic partnerships outside London, only three were councils.
The government says more of the programme’s unallocated money will be directed towards council construction later. At present, however, this remains a promise stretching to 2036 rather than an accomplished revival of public housebuilding.
The latest completed-year figures show the scale of the starting point. In 2024-25 — a construction pipeline largely inherited from the Conservatives but completed during Labour’s first months in office — England recorded 12,198 gross additions for social rent. Yet after sales, conversions and other losses were counted, the social-rent stock actually shrank by 3,834 homes.
Councils delivered 10,480 properties within the government’s much broader affordable-housing category, accounting for only 16 percent of the total. This was celebrated as the highest level recorded since that data series began in 1991-92, but it was a record measured against a baseline created after council construction had already been driven almost to extinction. The figure doesn’t mean 10,480 new council homes were built for social rent. It includes several tenures and some acquisitions of existing properties.
The shortage now used to justify better treatment for landlords was therefore produced through decades of government policy. Public homes were sold, council borrowing was restricted and state funding was redirected towards higher-rent and private-ownership schemes. Successive Conservative and Labour governments made workers increasingly dependent on private property owners, then presented that dependence as an unavoidable feature of the housing system.
Nathan Emerson, chief executive of lettings-agent representative Propertymark, repeated the industry’s demand for conditions favourable to landlords.
“A sustainable private rented sector requires the right conditions for responsible landlords to invest for the long term,” he said.
“Increasing supply must remain a priority if we are to give tenants greater choice, improve affordability and create a more stable rental market.”
The “right conditions” for landlords are conditions under which rent remains a profitable investment. If the cost of buying and maintaining a property rises, landlords seek higher rents, lower taxes, weaker regulation or state subsidies. The industry’s version of sustainability means sustaining the owner’s return.
A large stock of council housing would approach the question from the opposite direction. A council doesn’t need to extract a private profit or increase the value of an investor’s portfolio. Rental income can be used to maintain existing homes, repay construction costs and finance further public provision. The completed homes remain public assets rather than becoming vehicles for private accumulation.
Public construction would also give workers an alternative to private renting. That would reduce the number of tenants competing for privately owned homes and weaken landlords’ ability to raise rents. The greater the availability of secure, low-rent public housing, the less power private owners possess over those who need somewhere to live.
This is why the long retreat from council housing can’t be explained simply as incompetence. Mass public provision would conflict with the interests of landlords, developers, banks and other sections of finance capital whose wealth is tied to property prices, mortgage debt and rental income. Within Britain’s imperial rentier economy, housing is protected as a financial asset before it is treated as somewhere for people to live.
Zoopla predicted that annual rent growth would reach 4 percent or 5 pery by the end of the year, roughly matching the average rise in workers’ earnings. But equivalent percentage increases don’t make tenants no worse off. Rent already consumes a large share of many workers’ incomes, while the same wages must cover food, energy, transport and every other necessity. An average also conceals the position of workers whose pay rises by less or doesn’t rise at all.
Rent represents a continuing claim by property owners on workers’ wages. The tenant receives no ownership in return and must keep paying to retain access to the same home. The landlord’s power comes not from producing the house each month, but from holding its title.
The property industry presents the resulting crisis as proof that landlords need greater encouragement. Rising rents supposedly demonstrate the need to protect investment returns, while falling investment is blamed on any measure that gives tenants more security. The deliberate destruction of public provision disappears from the story.
Government construction of council and social housing is a proven alternative to dependence on private landlords. Its suppression serves a class purpose: it protects the scarcity, asset values and rental income on which the property-owning class depends. So long as housing remains organised around those interests, tenants will continue to be told that the solution to landlord power is to make private landlordism more profitable.
