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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Latest Comments

warren
warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

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Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

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Tony Gimple
Tony Gimple 14 Apr 2017

I'm not at all surprised that so many landlords are still confused about what the tax changes really mean and how it will affect them. In particular, the blind rush to incorporation is leaving landlords...

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MH
MH 13 Apr 2017

You are right that the bank holidays are going to be spoiled in looking for the properties. But people who want to sell their property and looking for the better relocation, they can get benefits of this...

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bnellyb
bnellyb 08 Apr 2017

There will be an exodus of private landlords over the next 5 years as tax changes take effect, private landlords provide an important service to the rental market, why do housing associations and councils...

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Fred Cassman
Fred Cassman 07 Apr 2017

"Make it look like you are at home": often people forget this and share on facebook their location!

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jared townsend
jared townsend 05 Apr 2017

It'll be interesting to see how & if the Government's asset sale regarding mortgages helps

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SecomTech
SecomTech 04 Apr 2017

...and not one mention of the rules on PERMITTED DEVELOPMENT!!! Unless you have studied the plans you will not know...It's probable a high proportion would not need planning permission...BUILDING Control...

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Jonathan
Jonathan 03 Apr 2017

That's a very interesting study indeed. There is no doubt that new services and web apps such as Wonego.com in the UK or Roomster in the US will change the way people look for a flatmate, and that tenants...

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MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

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ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

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NathanG
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

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