A prominent lettings agency has taken the unusual step of warning tenants that parties using the sector for political capital may damage choice and increase rents. 

Tom Bill, head of UK residential research at Knight Frank, says: :As the general election moves onto the radar, the growing cost-of-living pressures faced by tenants will come under renewed focus. In the last month, there have been reports … of how far tenants are being squeezed across the UK. 

“It was also reflected in recent figures from the Office for National Statistics showing rents rose last month by the most since records began in 2016.

“The problem has been aggravated by landlords leaving the sector in recent years due to a series of tax and legislative changes. Landlords have been targeted for political capital, but lower supply mean tenants have also suffered. 

“More institutional capital is flowing into the rental sector but Build To Rent still only accounts for less than two per cent of stock so it doesn’t make a material difference to how rents move. The bad news for tenants is that politics rather than economics will be in the ascendancy as the election countdown begins.”

Bill’s comments come as his agency releases new data on prime London’s lettings market, which has seen rental values rise by 27 per cent in prime central London and by 23 per cent in prime outer London in the past three years, since the start of the pandemic. 

Knight Frank says annual rental value growth in March was 16.9 per cent in PCL and 15.2 per cent in POL, the lowest figures since November 2021 – however, they are still high by historical standards.