It's because of the privatisation of the Student Loans Company, the interest rates they are giving her are really high now, higher than a regular bank loan, and once you get in the higher wage bracket they take a huge amount of your monthly income. On top of monthly rent and council tax, it means that unless you live with your parents or something it will still take more time than it is worth to save up for a housing deposit.
The house my sister rents is ok, and her landlord isn't the worst, but tenants do not have enough rights to make it a desirable permanent option. You could always end up having to move home against your will, which is pretty common.