Supply and Demand Is Not a Justification for Soaring Rents

Table of Contents

• Introduction
• The Myth of Rising Costs Due to Low Supply
• The Consequences of Treating Homes Like Commodities
• When Rent Increases Can Be Justified
• A Call for Accountability

Introduction

In recent years, the phrase “supply and demand” has become the go-to excuse for landlords and letting agents defending sharp rent increases in the private rental sector. While this economic principle might work for consumer goods and luxury items, applying it to something as essential as housing not only distorts the truth but also fuels a crisis that continues to leave tenants across the UK in increasingly precarious situations.

Let’s be clear: housing is not a luxury. It is a fundamental human need. Framing rent increases as a neutral economic inevitability hides the real issue – a widespread trend of profiteering from a broken system where tenants are outnumbered, outpriced, and often powerless.

The Myth of Rising Costs Due to Low Supply

Despite claims made by many in the sector, there is no direct cost to landlords or agents associated with a shortage of rental properties. In fact, the opposite is true. When rental stock is limited, demand for available homes rises – and with it, the asking price.

This scarcity enables landlords to charge more for the same property, without making improvements or taking on additional expenses. Letting agents, many of whom charge a percentage of monthly rent, actually earn more from the same number of properties. There are no added taxes, no increased compliance costs, and no surge in maintenance expenses just because fewer properties are available.

So why are rents rising? Because they can. Because the market allows it. That’s not supply and demand – that’s exploitation.

The Consequences of Treating Homes Like Commodities

By treating housing like any other product, we normalise a system where homes are bought, sold, and rented not based on need, but on profit potential. The result? Families priced out of their communities. Tenants forced into poor conditions. Working people spending more than half their income just to keep a roof over their heads.

“If people hoarded food because its value was bound to go up when others starved, we would stop them. This is now happening with housing in Britain. A fundamental need for all has become a goldmine for a few” – All That Is Solid by Danny Dorling.

This isn’t just a market failure. It’s a moral one.

When Rent Increases Can Be Justified

That said, not all rent increases are rooted in greed. There are genuine circumstances where landlords may face rising costs that warrant a modest increase in rent:

• Mortgage rate hikes for those with variable buy-to-let mortgages
• Increased property insurance premiums
• New compliance requirements, such as upgraded EPC standards or selective licensing schemes
• General inflation affecting maintenance and service costs

But even in these cases, transparency matters. Tenants deserve to understand why a rent is increasing, and whether it’s fair or proportionate. Blanket increases based on “market value” do nothing but punish tenants who already have limited options.

A Call for Accountability

We must stop accepting “supply and demand” as a get-out-of-jail-free card for those profiting from a sector in crisis. It’s time to demand a more honest conversation about rent increases – one that recognises the imbalance of power in the rental market and prioritises housing as a right, not a revenue stream.

If we don’t, we risk entrenching a system where financial gain continues to come at the expense of basic dignity.

Tenant Angels is committed to supporting private renters across England and Wales, holding the sector to account, and pushing for a fairer, safer rental system.