Last month, I was working with a young homeless family on England’s south coast. The local council had found them a privately rented flat with an agreed rent, and provided a “landlord incentive” payment of £1,500. But, when the council emailed the landlord to confirm the arrangements, he replied to say that he was increasing the rent by £100 a month because “the market is moving in that direction”.
The property was mortgage-free, so the price hike could not be blamed on rising costs. This is not uncommon: Zoopla estimates that 70% of landlords have either no debt or a small mortgage. Nor was there some sort of supply shock: the council’s statistics showed that many thousands of homes in the local area (more than 8%) were sitting empty. The flat was not suddenly in a nicer location, nor in a better condition than before. The rent had gone up simply because there was nothing to stop the landlord from naming his price.