Generation Rent says rent hikes to market levels aren’t justified

Generation Rent claims that “landlords raising rent to market levels is not a valid reason for a rent hike”, despite it being legal under current government policies.

A survey by the tenant group reveals that 20% of renters have experienced rent increases driven by landlords adjusting rents to match market levels.

However, Generation Rent does admit that evictions have gone down in the last year.

Landlords are also grappling with the cost-of-living crisis

Generation Rent also reports a rise in the number of renters facing rent hikes, from 50% in late 2022 to 67% in early 2024.

The tenant group claims that the cost-of-living crisis has become another reason landlords cite for raising rents, alongside higher mortgage costs.

Generation Rent says: “Although the dramatic rise in interest rates in 2022 was predicted to fuel rent rises, this appears to have affected only a small share of landlords compared with other factors.

“It’s important to note that just 42% of landlords claim mortgage costs in their tax returns.”

Many landlords are also grappling with the cost-of-living crisis, with Finbri’s report revealing that 77% of landlords are concerned about the rising living costs.

One landlord argues that government policies, such as Section 24, are the real cause of skyrocketing rents, not landlords themselves, and that these policies are ultimately hurting tenants.

One in five renters encountered bidding wars

According to a Generation Rent survey, one in five renters who moved in 2023-24 encountered bidding wars, compared to just one in 40 renters who moved in 2019 or earlier.

The tenant group is calling on the government to ban bidding wars and implement a policy similar to New Zealand’s, where landlords are prohibited from encouraging tenants to bid above the asking price, but renters are allowed to offer higher prices as long as they are not pressured.

However, critics argue that since this policy was introduced in New Zealand, average rent prices have risen.

Evictions have gone down

Generation Rent also acknowledged that evictions have gone down, with about one in six renters facing an unwanted move last year, compared to one in five in summer 2023.

The survey showed a drop in landlords using Section 21 notices or asking tenants to leave without formal notice. Instead, more landlords are using Section 8 (usually for rent arrears), and more tenants are simply moving out at the end of their fixed-term.

The survey also reveals one in four renters faced deposit deductions that they felt were unreasonable, or just didn’t get it back. Of those, just one in five used their deposit protection scheme’s dispute process to try to recover what they were entitled to.

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