James* and his fiancé had lived in their flat for two years, and they were pretty pleased to have avoided a rent hike. It was a small flat on the outskirts of London, priced at the maximum they could afford. Then, days after Kwasi Kwarteng delivered that now infamous budget, the email came.

“[The landlord] said: ‘I've talked to the estate agents and they've advised me I could be making a killing right now,” said James, who asked to remain anonymous so his tenancy wouldn’t be affected. “[The landlord said]: ‘I have been undercharging for a while but due to mortgage rate increases and inflation, it's not viable as a business to not increase the rent.”

James is just one of the millions of renters paying the price for the UK’s recent economic instability. Private renting in the UK was already unaffordable, of a poor standard and insecure. But after Kwarteng’s mini-budget sent mortgage rates soaring, things have worsened as landlords pass on their own increased costs to tenants – despite sitting on a growing asset – all amid a cost of living crisis. Now, with Liz Truss having resigned after just chaotic days in power, and the Westminster bubble fizzling with parliamentary drama, it is the most vulnerable who will take on the brunt of this history-defining political insecurity.

“Inflation means that our wages are worth less,” said James. “We can’t afford to go on holiday, we need to buy a car, we want to have kids, we want to get on the property ladder and obviously every extra £100 that goes into [the landlord’s] account is money lost that would go on that.” He added: “It’s very upsetting.”

While some are struggling with rent increases due to the mortgage rates, others are losing their homes. Ewan,* 25, who asked us not to publish his real name for fear he would be rejected from future tenancies, has been told he must leave his London flat six months before expected due to new, increased costs for his landlord.

“It is very stressful,” he said. “It would have been fine, if not for the whole other situation with the rental market. I know how much competition there’s going to be for finding my next flat.”

Work is the only thing keeping Ewan from leaving the capital altogether. “If my partner didn't work in London, I would probably move out of London and move home back to the north-west,” he said. “I’m at the whim of politicians who are completely disconnected from me.”

At the sharpest end of this crisis are those facing homelessness. There is a chronic national lack of social housing after decades of privatisation, including the net loss of 1.4 million council homes through Margaret Thatcher’s ‘right to buy’ policy. As a result, councils rely on private landlords to house those at risk of homelessness. Last year, local authorities spent £1.4bn on private temporary accommodation, including rooms in B&Bs and hotels.

One London council staffer who works in housing told openDemocracy the mini-budget had created a crisis in an already struggling sector.

“There's been growing pressure on temporary accommodation properties across the country for years and years now,” they told openDemocracy. “We have a lot of properties that are used or owned by private landlords who tend to be on incredibly low margins on variable rate mortgages. Now that their mortgage rates have been pushed up, more and more private landlords are requesting back the properties that we use for temporary accomodation. There’s a real impact on people who are in incredibly dire straits already.”

Welfare reforms in 2011 and 2013 had already squeezed the provision of appropriate accommodation for homeless families, they added, but Liz Truss’s short leadership has made things far worse.

“It's incredibly bad,” the council worker added. “There is absolutely no safety net.”

Rents in the UK are unregulated, allowing landlords to raise them at whim, with little recourse to challenge – which is why many tenants would only speak to openDemocracy anonymously.

No support has been announced for tenants in England, like that seen during the coronavirus pandemic. In Scotland, the SNP has implemented rent controls and a moratorium on evictions in response to the cost of living crisis. However, landlords who face increased costs – such as buy-to-let landlords on variable-rate mortgages – are still able to raise rents under the legislation.

Tenants' unions are now calling for a rent freeze and an eviction ban to force some stability in a market that continues to worsen.

“It is unacceptable that the government is leaving tenants to bear the brunt of mortgage increases,” Jack Yates, a communications officer at Acorn, told openDemocracy. “With the vast majority of landlords charging far more than they pay out on their mortgage and overheads, rent rises will generally be a case of them deciding to pass on costs to protect their profit margin. Yet again tenants are being forced to pay the price for a housing sector that prioritises profit over people.”

He added: “The government needs to urgently implement a rent freeze and an eviction ban to ensure that the cost of living crisis doesn’t cost tenants their home.”

National data paints a picture of how rent costs are spiralling out of control. Statistics on private rents published on Wednesday by the Office for National Statistics show rents are rising at their fastest rate since records began, with tenants facing a 3.6% increase. For those in the Midlands or Scotland, however, or those in new tenancies, rent increases are likely to be far higher – closer to 10 or 20%. The National Residential Landlords Association claims landlords have no choice but to raise rents as mortgage rates rise, while investor service Moody’s says that, in order to maintain profitability, buy-to-let landlords have to put up rents by as much as 28% because of mortgage rates.

Housing charities including Shelter have warned of the dire consequences of passing these costs straight onto renters.

“Private renters are the group most vulnerable to economic shocks because they spend more on housing costs than anyone else and almost half have no savings,” said chief exec Polly Neate. “Rents are at an all-time high, so if landlords are struggling with interest rates, how can we expect tenants with little financial security to keep footing the bill?”

She added: “More than a million tenants have already had their rent hiked in the last month alone. Unless the government helps low-income renters by urgently unfreezing housing benefits, homelessness will rise. A surge in homelessness will cost the economy far more, and ruin lives.”

*Names have been changed