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.”

Join our mailing list:

Leave a comment



Latest Comments

Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

view article
maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

view article
maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

view article
zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

view article
Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

view article
Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

view article
RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

view article
sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

view article
Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

view article
Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

view article
Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

view article
Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

view article

Related stories

More articles from Landlords