Generation Rent says rent hikes to market levels aren’t justified

Generation Rent says rent hikes to market levels aren’t justified

0:01 AM, 25th November 2024, About A week ago 21

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Generation Rent claims that “landlords raising rent to market levels is not a valid reason for a rent hike”, despite it being legal under current government policies.

A survey by the tenant group reveals that 20% of renters have experienced rent increases driven by landlords adjusting rents to match market levels.

However, Generation Rent does admit that evictions have gone down in the last year.

Landlords are also grappling with the cost-of-living crisis

Generation Rent also reports a rise in the number of renters facing rent hikes, from 50% in late 2022 to 67% in early 2024.

The tenant group claims that the cost-of-living crisis has become another reason landlords cite for raising rents, alongside higher mortgage costs.

Generation Rent says: “Although the dramatic rise in interest rates in 2022 was predicted to fuel rent rises, this appears to have affected only a small share of landlords compared with other factors.

“It’s important to note that just 42% of landlords claim mortgage costs in their tax returns.”

Many landlords are also grappling with the cost-of-living crisis, with Finbri’s report revealing that 77% of landlords are concerned about the rising living costs.

One landlord argues that government policies, such as Section 24, are the real cause of skyrocketing rents, not landlords themselves, and that these policies are ultimately hurting tenants.

One in five renters encountered bidding wars

According to a Generation Rent survey, one in five renters who moved in 2023-24 encountered bidding wars, compared to just one in 40 renters who moved in 2019 or earlier.

The tenant group is calling on the government to ban bidding wars and implement a policy similar to New Zealand’s, where landlords are prohibited from encouraging tenants to bid above the asking price, but renters are allowed to offer higher prices as long as they are not pressured.

However, critics argue that since this policy was introduced in New Zealand, average rent prices have risen.

Evictions have gone down

Generation Rent also acknowledged that evictions have gone down, with about one in six renters facing an unwanted move last year, compared to one in five in summer 2023.

The survey showed a drop in landlords using Section 21 notices or asking tenants to leave without formal notice. Instead, more landlords are using Section 8 (usually for rent arrears), and more tenants are simply moving out at the end of their fixed-term.

The survey also reveals one in four renters faced deposit deductions that they felt were unreasonable, or just didn’t get it back. Of those, just one in five used their deposit protection scheme’s dispute process to try to recover what they were entitled to.


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Cider Drinker

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19:12 PM, 25th November 2024, About A week ago

When setting a new rent I look at a number of things.

1. How much does it cost me to run the property.

2. How much do I want to set aside for risk.

3. How much profit do I want to make it worth my while.

This gives me a figure for what I need the rent to be.

I then consider what I need against market rates for similar properties and the Local Housing Allowance.

If what I need the rent to be is less than market rates, I go for what I need.

Peter Merrick

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22:36 PM, 25th November 2024, About A week ago

Maybe rents should be subject to the same percentage rise as the tenant's income, so if it goes up 6% then it's fair that the landlord should get 6% more, all things being equal?
Thought not!

Jim K

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11:36 AM, 26th November 2024, About 7 days ago

Reply to the comment left by Reluctant Landlord at 25/11/2024 - 13:40
Hi.
Not sure about this last paragraph.
'Market rent is also known as "private rent". It's based on the average private rent level for similar properties in a specific area.'
--------------
I would take market rent as new let asking rents.
There are many reasons why a long term tenant 'may' be granted a lower than new let rental rate.

Neil Robb

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22:38 PM, 26th November 2024, About 6 days ago

Just like all there surveys shelter generation rent acorn tenants union etc .

It is normally their members who respond to them .

When you look at the figure out of 5 million tenant their surveys may have a few thousand or hundred respond

SimonP

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19:29 PM, 29th November 2024, About 3 days ago

Reply to the comment left by Beaver at 25/11/2024 - 13:03
" “It’s important to note that just 42% of landlords claim mortgage costs in their tax returns.”

So if that figure is correct then 58% of landlords do have mortgage costs."

Huh!!! SMH

GlanACC

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8:46 AM, 30th November 2024, About 3 days ago

Rents are set at what the landlord is comfortable to accept. I have 6 properties with long term tenants and I do not have any mortgage to factor in to the rent, so my rents are £150 to £200 less than the 'market rent'.

As long as I cover my costs and make enough to make it worth while, then that is the rent I will set.

Making more profit also means you pay more tax, I do factor that in !

Bernard Mealing

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11:30 AM, 30th November 2024, About 3 days ago

It's way overdue but let's start talking about the different type of buy 2 let. First there is the general private Renters. which really has an number of sub divisions Then there are the council funded tenants. a completet different animal. and again this is diveded by a number of sub divisions ie Part council/ UC and part from those doing 16 hours a week etc. They are very little comparisons. Rent In may area seem to be about £300 a month more for private renters.
A nice Christmas game. How many sort/types of renters are there. My spare mince pies ( post Christmas ) will be on offer !
Merry Christmas everyone.
Me I think this year will be a lot more profitable than last year....We have to keep moving our goal posts to suit the markets. And the Government needs to beat us up...

Mick Roberts

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15:34 PM, 30th November 2024, About 3 days ago

Aah right cause I've been savvy & gone without & paid mortgage off & no longer have mortgage, I'll just let Generation Rent have cheap rent will I?
Aah Ok din't realise I was a charity. Din't realise that Generation Rent was my brother, sister, Mum & I should be letting them pay me less than I can get.
I/We need every penny possible cause we just don't know what's coming next.
Who could have foreseen Section 24?
Who could have foreseen Selective Licensing? You put tenant new boiler in, new kitchen, new bathroom, charge em £200pm cheaper than anyone else, then Nottingham Council comes along & say Ooh we know u doing good job, but u got to give us £900 License fee now cause that Landlord down the road not doing a good job & we gonna' use your money to employ 76 staff to check your boiler certificate is genuine.

GlanACC

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19:49 PM, 30th November 2024, About 2 days ago

Reply to the comment left by Mick Roberts at 30/11/2024 - 15:34
Yes Mick, the penny has dropped, you are a charity, the government is treating us as mugs

Beaver

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14:07 PM, 2nd December 2024, About 15 hours ago

Reply to the comment left by Mick Roberts at 30/11/2024 - 15:34
According to the independent the UK has seen a surprise jump in house prices:

https://www.independent.co.uk/news/uk/home-news/uk-house-price-average-nationwide-figures-b2657265.html#:~:text=The%20average%20UK%20house%20price,fastest%20rise%20since%20November%202022.

That's because of growing demand.

According to the telegraph net migration hit a record high last year:

https://www.telegraph.co.uk/news/2024/11/28/net-migration-hit-nearly-one-million-last-year-170000-more/#:~:text=Net%20migration%20hit%20a%20record,for%20National%20Statistics%20(ONS).

Clearly, that's not going to be reducing the home-grown domestic demand.

According to the BBC millions of people are going to see their mortgage costs rise over the next 3 years:

https://www.bbc.co.uk/news/articles/cn8g3n9y5x0o

None of these things is the fault of landlords. This is all about government policy.

And every time government piles more risk onto landlords (e.g. by not letting landlords offset their interest payments against rents) they drive rents up.

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