Rising rent and the housing crisis - What the UK really thinks
This Ripple Research investigation uses a bottom-up narrative analysis to uncover how UK households really feel about systemic housing challenges and the soaring cost of rent gripping the nation.
It’s no secret that the United Kingdom is experiencing a housing crisis. For decades, the average annual house price has disproportionately risen when compared to wage growth and percentage of disposable income, as illustrated in Exhibit 1. This has rendered millions of citizens across the UK unable to purchase a home or meet mortgage payments.
Exhibit 1 - Rate of average annual house price increase vs increase in average annual wage
As the reality of home ownership becomes increasingly exclusive to high-wage earners, those with large inheritances or first-time buyers with financial support from their parents - housing challenges have become a focal point of political and social debate in the United Kingdom. Depleting social housing stock and the rising cost of renting has added further fuel to the fire. How then, does the impending economic recession and turmoil created by the cost of living crisis exacerbate these tensions for the nation?
This Ripple Research analysis explores the realities of the cost of living crisis - through the lens of the ongoing housing challenges experienced within the United Kingdom. Our team has conducted a narrative and topic analysis across over 160,000 conversations, and used advanced geo-location tools to uncover the lived experience and dominant narratives surrounding the housing emergency. Read on to discover our key findings.
The UK’s cost of living crisis
Like many nations around the world, the UK is in the midst of a cost of living crisis and a looming economic recession, amidst soaring levels of inflation - set to top 10% by the end of the year and a hike in interest rates for the sixth consecutive time by the Bank of England.
There are many contributing factors to the cost of living crisis for households across the UK, be that the price of energy, food, petrol or rent. Consumers are currently grappling with energy bills, predicted to rise over 80% in October, whilst grocery price inflation has reached 8.3% between May and June - the highest level in 13 years. The cost of essential commodities like petrol, reaching nearly 180p /litre is impacting Brits too, as nearly 70% of the population drive to work each day.
A salient factor accelerating the magnitude of this crisis is the cost of rent, which is pricing many out of the market. Our investigation into the cost of living crisis will use housing challenges and the rise in rent as a lens to examine the true feelings of UK households during this period of economic uncertainty.
Average private rents in Britain have hit record highs, jumping by more than 20% in some areas
Private rental prices paid by tenants in the UK rose by 3.0% in the 12 months to June 2022, up from 2.8% in the 12 months to May 2022.
In Manchester, the average asking rent is up 23.4% in a year – from £913 in the second quarter of 2021 to £1,127 in the same period this year.
In the first quarter of 2022, rents across the UK increased by 11% for newly agreed lets
Demand for rental homes is strong in areas including Scotland, Wales and London, where levels are 68% above the five-year average.
The jump in rent has left the average single renter spending approximately 37% of their income on housing. In London, the proportion of income spent on rent increases to 52% for single renters.
Using a bottom-up analysis, we reveal the true lived experience of people in the UK
We collected and analysed over 160,000 online conversations that occurred from January 1st to July 31st 2022, to better understand the realities of the housing situation for people across the UK. Leveraging our narrative research capabilities, like hashtag analysis and topic modelling, we identified the most dominant narratives at play related to the housing crisis.
Alongside language analysis, we used advanced geo-location tools to identify specific cities where these issues are most pressing and causing a larger spike in conversation volume.
For example, Stoke in the West Midlands generated high levels of conversation volume which could be linked to the fact the city is reported to have been hit hardest by the cost of living crisis compared to others in the region and alongside reports that the city council plans to demolish several housing estates, home to over 374 properties prompting more concern about depletion in social housing.
How are people in the UK talking about the housing crisis?
Exhibit 2: Online conversation volume about housing between January 1st and July 31st 2022
The conversation about housing challenges has become increasingly prominent since May.
The spike in conversation volume between May and June of this year is explained by two key events. Firstly, the national broadcasting of BBC Question Time on June 9th. This included a debate about housing shortages, affordable housing and who is responsible for financing the construction of more homes.
The second contributing event was the mounting tensions about the Conservative Party’s reintroduction of the ‘Right to Buy’ scheme, which is designed to give qualifying council tenants a chance to buy their homes. Homeownership is a central pillar of the Conservative Party’s ideology and the scheme was first introduced by Margaret Thatcher in the summer of 1980.
In his speech, Prime Minister Boris Johnson stated “Just as no generation should be locked out of home ownership because of when they were born, so nobody should be barred from that same dream simply because of where they live now.” However, the announcement by Boris Johnson on June 9th has been criticised for failing to tackle the decades-long housing crisis.
It generated heated debate amongst politicians, with some even claiming the announcement was used as a distractionary tactic from ongoings elsewhere in Government, including the controversial incident of sending asylum seekers to Rwanda.
The UK hotspots of the housing crisis
Our research as indicated in Exhibit 3 has found that the capital city of London sparked the highest volumes of conversations on housing challenges, significantly greater than cities in the North such as Manchester, Birmingham and Leeds.
Exhibit 3: Cities across the UK that generated the highest volume of conversations about housing
The correlation between our results and Rightmove’s rental price data is high, but there are some disparities. For example, in the Rightmove analysis, the city of Manchester actually has the highest average yearly rent increase - growing a staggering 23.4% from £913 to £1127 in the space of a year. The property website’s data also pinned Chatham in Kent in second place where city renters experience a 21.4% rise, followed by Liverpool at 19.4%.
From our analysis, whilst Liverpool features in the top 10 cities with the highest volume of conversations, the county of Kent and Chatham more specifically does not appear.
London experienced a slightly lower average year-on-year increase in rent prices of 15.8% but this was noted by Rightmove as the fastest rate of any region across the UK.
How has the housing crisis made people in the UK feel?
It comes as no surprise that the housing crisis and tangential topics evoke largely negative sentiment.
Exhibit 4: Online conversations about housing in the UK are dominated by negative sentiment
Sadness and Anger have been detected as the dominant emotions expressed throughout online conversations. These emotions peaked in early June - following the announcement of the reintroduction of the Right to Buy scheme on June 9th, as well as the airing of BBC Question Time. Both events shone a light on the lack of affordable housing available across the country. Anticipation over the reintroduction of the Right to Buy scheme had been building since May, during the local elections as this was a focal point of contention amongst politicians and explains the steady increase in sadness and anger. During BBC Question Time, one audience member voiced the concerns of many, asking “Will extending the right to buy to housing associations provide a further shortage of rented accommodation and therefore push up rents?” which contextualises these emotions.
Our analysis also revealed that Disgust characterised 11% of the conversations. This could be explained by critics who believe that the right-to-buy scheme will decrease affordable social housing and condone it as an unpopular Thatcherite policy.
It is overwhelmingly clear there is minimal Joy as people work through the long-term implications of their renting challenges, the shrinking probability of ever being homeowners, as well as the added angst over the cost of living crisis.
The dominant online narratives of the housing crisis
Exhibit 5 - Trending topics and the dominant narratives associated with the housing crisis
Through our narrative and topic analysis, we have identified key trending topics in Exhibit 5 which have informed the formation of three major themes driving the conversations surrounding the UK Housing Crisis, depicted in Exhibit 6.
Exhibit 6 - Narrative analysis revealed three core themes surrounding the UK housing crisis
Renters vs landlords war
We detected specific tensions held between renters and landlords in relation to the housing crisis, with prominent hashtags such as #landlords #rightobuy #tenants #affordablehousing #ukhousing #rent appearing frequently.
Not only is the problem of increasing the cost of rent provoking angst towards landlords, but the instances of tenant bidding and impossibly long wait lists to view properties are driving this conversation further as renters vent their frustrations online. The BBC reported that the number of available rentals for 440 letting agency businesses spread across 4000 branches in the UK has halved this year.
Interestingly, #Section 21 gained over 130 mentions in our analysis. Section 21 is a notice that landlords must give their tenants at least 2 months' notice when being asked to leave their property. For landlords who are not hiking up prices, many are selling up shop and requesting their tenants leave through these types of notices and therefore decreasing inventory of housing stock further.
The political blame game
Politicians and citizens alike have used the housing crisis as an opportunity to point the finger at who is to blame for the systemic issues related to renting, mortgages and access to social housing.
From a party perspective, #toryleadershipfarce #levellingup #toriesout #borisjohnson amassed a significant volume of hashtags, especially in relation to the other perceived failings of the Conservative Party, be that on the handling of migrants and sending asylum seekers to Rwanda or the lingering aftermath of the lockdown Party Gate scandal.
Timing has amplified this political narrative. During the months of May, June and July of this year - calls for the resignation of Boris Johnson mounted to a crescendo on 7th July when he begrudgingly resigned, after the mass resignation of prominent cabinet members which forced his hand.
More broadly, ideological tensions related to the housing crisis also run throughout our topic analysis with #taxtherich and #capitalism featuring in a number of conversations.
The energy crisis, homelessness and fuel poverty
The third clear narrative revolves around how housing challenges feed into wider anxiety about the cost of living and energy crisis with hashtags related to #costoflivingcrisis #energycrisis and #costofliving.
Hundreds of conversations are marked by #homelessness and #homeless as the number of people sleeping rough on the streets and seeking temporary accommodation is set to rise to over 66,000 by 2024 according to Crisis, a housing charity.
Concerns about the impact of the energy crisis on the rate of fuel poverty are also apparent. Fuel poverty is defined as having to spend over 10% of net income on fuel. The End Fuel Poverty Coalition has predicted that by January over 10 million households will be in this situation.
What’s more - this increased rate of fuel poverty has health implications and could, when paired with the cost of living crisis, eventually lead to excess deaths according to Professor Linda Bauld, a leading public health expert. This reinforces that any neglect of energy and housing issues is a neglect of the most vulnerable communities across Britain.
Can the new Prime Minister reverse the pessimistic outlook and narratives on housing challenges?
The UK housing crisis offers a lens to better understand the thoughts and emotions experienced by the British population as they tackle a post-pandemic world tainted with economic volatility, political conflict and the rise in the cost of living.
Housing challenges, be that the rise in the cost of rent or the decrease in the stock of affordable social housing highlight how mishandling of such situations can widen the gap in equality - especially as lower income earners are priced out of specific geographical areas like Cornwall.
Our research reveals an overwhelming lack of positive sentiment or hope for the future of housing. This level of doomism, is especially poignant amongst the youngest generation of society, namely millennials and Gen Z who are waving goodbye to the idea of ever being able to afford their own home.
The fear, anger and sadness detected in a significant volume of conversations we analysed points to another critical question - how is the housing crisis affecting the population's mental health and what infrastructure is in place to support people throughout this time? As more households enter fuel poverty and scrape by with little disposable income, Shelter report that one in five people have experienced mental health issues because of housing problems.
Our final consideration is how the narratives revealed, whether in relation to landlord versus renters tension or the energy crisis, can influence political campaigns or be hijacked by political candidates. The race for the next Conservative Prime Minister is an opportune moment for frontrunners Rishi Sunak and Liz Truss to offer a solution to the systemic housing issues on mortgages, renting and social housing. Political short-termism and crafting policies to simply garner more media attention will not suffice, as the public remains sceptical.
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