45% of landlords say they will raise rents next year

45% of landlords say they will raise rents next year

A new survey carried out by flatshare site, SpareRoom.co.uk, has found that 45% of BTL landlords are planning to raise their rents in 2016, and almost one in five (18%) are planning inflation-busting increases of more than 3%.

The most common reason landlords cite (38%) for raising rents is the additional costs incurred by new government legislation2, meaning future cuts to mortgage interest and wear and tear tax relief, stamp duty changes and costs of the 2016 Right to Rent roll out will be felt by tenants as well as landlords.

Other reasons for rent increases include rents rising locally (23%), expensive property repairs and maintenance (6%) and higher mortgage repayments (4%).

The table below shows what landlords plan to do with rents next year:

Landlords: What do you plan to do with rents in 2016?

Response (%)

Raise by more than 3%

18%

Raise by less than 3%

27%

Keep the same

52%

Lower by less than 3%

1%

Lower by more than 3%

2%


The reality is that average room rents may rise far higher than 3%, based on rental increases over the past year, and given the changes ahead for landlords. The average UK rent for a double room in shared accommodation rose by 8.6% in the past year to £593 per month – up from £546 the previous year – according to SpareRoom’s rental data. In London, the average room rent has increased annually by 6.3% to £721 per month, up from £678 a year ago4.

Given that 49% of landlords increased their rents in 2015 and a further 20% increased them within the past two years3, this will be yet another blow for renters who are already stretched when it comes to affordability. Tenants will be hoping their landlord is one of the 55% who don’t plan to increase their rents next year or, if they’re lucky, one of the 3% reducing them.

Matt Hutchinson, director of SpareRoom.co.uk, comments: “The roll out of Right to Rent legislation, removal of mortgage interest tax relief and changes to the wear and tear tax break from 2017, on top of stamp duty changes coming in 2019, means buy to let looks like far more of a risk than it did at the start of the year.

The worry is that tenants will bear the brunt of these changes. And if renters end up being the ones to shoulder the burden of legislative change, something has gone very very wrong. The private rental sector is already under immense pressure.”

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Jimmy_McCoy
Jimmy_McCoy 16 Sep 2016

I think that the main reason to buy garden purchases in last minute is because people always search for the best deal. In summer months there are abundance of seasonal goods and it means more low cost

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Jimmy_McCoy
Jimmy_McCoy 16 Sep 2016

Buying a home often is more expensive than you expect. There are lots of hidden costs such as: stamp duty, surveys and valuations, mortgages etc. that can add more than 10% to the total bill

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Homebuyerconveyancing 15 Sep 2016

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oliviaG 12 Sep 2016

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oliviaG
oliviaG 29 Aug 2016

So true about cats!

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Jason Roberts
Jason Roberts 25 Aug 2016

Any predictions what average rent will be at the same time next year, anymore drops coming?

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dylanvan
dylanvan 19 Aug 2016

very good, thanks for sharing

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SecomTech
SecomTech 19 Aug 2016

Firstly, I either lodge with DPS or do not take a deposit...secondly, If a tenant has not received a confirmation their deposit is secured with either a scheme or in an insured account with an agent/landlord,...

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jasonevans
jasonevans 19 Aug 2016

Belvoir has over 15 years of experience in property lettings, buying and renting and is one of the best agencies I know about. I have heard that they revived an award for the hard work. Really amazing...

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jasonevans
jasonevans 19 Aug 2016

Usually these areas are least affected when it comes to unexpected economical collapse.

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TheWaspNestRemover
TheWaspNestRemover 11 Aug 2016

You agree to pay for the treatment needed to get rid of fleas, ants, mice, wasps nests and other pests unless you can prove that these are a result of us not meeting our repairing responsibilities or these...

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madisonwelch80
madisonwelch80 02 Aug 2016

16% is quite a raise. Let's hope this tendency won't continue for long.

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