Activists say they know rent levels two years from now

Generation Rent says it’s worked out what rent levels will be in two years’ time.

The activists say rents will rise 14 per cent above new benefit levels by late 2025. 

A statement from the group says: “Record rent inflation in England will rapidly outstrip the increase in social security for renters announced in the Autumn Statement, leaving affordability for low-income households almost as bad as it is today after just 18 months.”

The group has forecast rent inflation of 8.5 per cent between now and late 2025, taking rents 14.2 per cent higher than the level used to set the level of support that private renters getting Universal Credit or Housing Benefit will receive from April 2024.

It says the government must permanently re-link Local Housing Allowance with actual rents, following the move by Chancellor Jeremy Hunt who last month announced that LHA would be increased to the 30^th percentile of local rents after a four-year freeze.

The Chancellor’s LHA increase, which will be based on average rents in the year to September 2023, will take effect in April 2024. These new levels of support will be 13.3 per cent higher than those renters currently get. 

Generation Rent claims to have developed a model to predict rent inflation, as measured by the new rent index published last week by the Office for National Statistics using wages, population and housing stock data. 

By the last quarter of 2025, rents in England are likely to be around 8.5 per cent higher than they are today and 14.2 per cent higher than the reference rents that will determine April’s new LHA rates. 

And it claims: “For those reliant on benefits, that will return housing affordability most of the way back to its current unsustainable levels just 18 months after the LHA increase takes effect.”

Dan Wilson Craw, deputy chief executive of Generation Rent, says: “Last month’s announcement of an increase in LHA is sorely needed but will be overtaken quickly by actual rents, and tenants facing painful decisions today will be in the same position in two years’ time. It is past time for the government to re-link LHA with local rents permanently so support automatically adjusts to housing costs every year.”

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