Annual rental inflation at 10.6% for May

Annual rental inflation at 10.6% for May

16:17 PM, 9th June 2022, About 2 months ago 2

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The HomeLet Rental index for May indicates annual average rental inflation stands at 10.6% with an average rent of £1,103 or £928 excluding  London.

This is an overall monthly change of 1.1% with inflation the highest in Northern Ireland at 1.9%.

Mike Dawson, Group Sales Director for HomeLet and Let Alliance said: “With pressure on households, we’re seeing tenants stay in properties for longer. As summer approaches, we expect them to move at a faster rate, continuing the upward trajectory of average rents for new tenancies.

“The rental market plays a critical role in satisfying the UK’s housing needs, and the long-awaited Renters’ Reform Bill needs to strike the right balance by protecting both tenants and landlords. With many landlords already exiting the market, the government’s commitment to legislation will provide the biggest change to rental law in a generation and shouldn’t risk marginalising landlords even further.

“There’s a genuine risk that we will continue to see a decline in the number of landlords in the UK. Ultimately, tenants will foot the bill if the level of stock decreases and demand grows, as we saw with the 2019 Tenant Fees Act.



Comments

Jessie Jones View Profile

11:32 AM, 12th June 2022, About 2 months ago

Hi guys,
I am interested in what other landlords do about rent inflation.
I typically have 5 year fixed interest rate mortgages, so I don't actually need to increase my rents at this stage. But the consequence of not having annual rent increases means that my tenants are now paying only 80% of the market rent. In the past I have put the rent up to market values only when a house becomes vacant, but where i have good tenants I don't increase the rent for the first two or three years and have then capped my increases at a little under CPIH. Last year I asked for about 2% extra.
However, with rent inflation now running at over 10%, I am concerned that I will need to seek similar increases across my portfolio otherwise my tenants will be paying closer to 75% market value if I only increase by 2% again this year.
Mortgage rates are creeping up again, and if my next 5 year deal is considerably more expensive than my current ones, it would be unrealistic to seek a 20% rent increase to make up for tiny rent increases in previous years.
It's a pressure to increase rent 'just in case' of what the future holds.
What do other landlords on here do?

CMS View Profile

3:34 AM, 13th June 2022, About 2 months ago

Reply to the comment left by Jessie Jones at 12/06/2022 - 11:32
I am contemplating, any tenancy i grant in excess of 12 months, having an annual review in accordance with the ONS percentage increase during that term and for that area. I know that isn't the same as inflation but it is fair as it is based on the market rents only and is really just asking the tenants to pay money's worth.

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