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

ChristinaReedUK
ChristinaReedUK 20 Jun 2016

I don't understand why it's always a war between the two sides. Either, way the landlord is probably keeping a detailed inventory and will see the changes you've made. I just don't understand why there...

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NathanGreen
NathanGreen 16 Jun 2016

Seeing that the tenants are quite satisfied with their landlords and the properties is indeed great. I wonder, though, what is the situation in London alone? The tenants face sky-high rent levels in the...

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AndiMur
AndiMur 15 Jun 2016

TheGuardian published the same forecast. But on the other hand, professional brokers express different opinions. According totranio.com, an exit from the EU would not affect the demand/supply imbalance...

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Gary Holmes
Gary Holmes 14 Jun 2016

Having a professionally completed inventory at check-in and check-out is clearly (to me at least) of minor value. Tenants make un-authorised modifications and/or walk off with items that belong to the

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Violet Gibson
Violet Gibson 14 Jun 2016

Cautious people think buying off-plan is reckless, but over the past few years investors have literally made fortunes.Pre-release prices have obvious benefits for the developer, who gets instant finance...

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Kate Windleton
Kate Windleton 14 Jun 2016

An interesting research indeed. I guess that is in complete contrast with the United States where people often move from one coast to another. It will be interesting to hear the trends for people moving...

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NathanGreen
NathanGreen 14 Jun 2016

I think it all depends on the market conditions and how well your company is doing. You will agree that you can't demand more when you're killing yourself just to hang in there. Sometimes you need all

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ChristinaReedUK
ChristinaReedUK 13 Jun 2016

What does "detecting a bad vibe" mean actually. I've had certain vibes like these and yet have always found a reason , if there's any, why I don't like a certain property. The property maintenance might...

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keybanks estates
keybanks estates 08 Jun 2016

Great News for first time buyers, about time two!

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NathanGreen
NathanGreen 07 Jun 2016

I agree with #6 - you should maintain your garden according to the target buyer. One thing is universal, though - cleanliness and order. Having the yard clutter-free and clean will help people who do enjoy...

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NathanGreen
NathanGreen 06 Jun 2016

I will always say that London is overrated. Sure it is the capital, but it's too stuffed in there. It's more of a business city to me.

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Paul
Paul 25 May 2016

Estate agents are pathetic when it comes to fees. They have this 'I had to do it at 1% because that's what the others were quoting' mentality. We are the most expensive agents in our area, charging double...

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