Affordable homes to rent are ‘scarce and in high demand’
2 years ago | 5 comments
Landlords raise rents to cope with rising costs, survey shows
12:05 AM, 31st October 2023, 2 years ago
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Many landlords in the UK are hiking rents to deal with increasing costs, especially higher interest rates and legislation changes, a survey reveals.
The findings from The Deposit Protection Service (The DPS) show that three-quarters (75%) of landlords have either increased rents in the past year (40%) or intend to do so soon (35%).
The DPS, which is the UK’s largest protector of deposits, surveyed more than 1,000 landlords and found that most landlords (72%) agreed that keeping rents aligned with their local market was a key factor in their decision to increase prices.
‘Most landlords see a future in the rental market’
Matt Trevett, the managing director at The DPS, said: “Demand for rental property remains high, and our survey suggests most landlords see a future in the rental market.
“However, landlords have also told us that their costs have increased recently, particularly as a result of higher interest rates – and it seems a large proportion are raising rents to cover their expenses.”
He added: “Clearly increases to interest rates and the cost of living will also be affecting some tenants, and we’d encourage both renters and landlords to have an open and constructive dialogue about financial pressures in the current economic climate.”
Factors for landlords to increase rents
Other important factors for landlords to increase rents were rising costs related to legislation and compliance (68%), maintenance (62%), and risks such as the proposed end of section 21 ‘no-fault’ evictions (55%).
Also, the majority (54%) of landlords stated that their mortgage lender’s requirements, such as financial stress tests and affordability checks, had no impact on their decision.
And 53% reported that rising costs of letting agents were also irrelevant to increasing rents.
Paul Fryers, the managing director at BTL lender Zephyr Homeloans, said: “It’s interesting to note that, although there is a perception that costs associated with securing a mortgage and using a letting agent have increased, most landlord survey respondents do not think those costs affected their decision to increase rents.
“It seems interest rates and broad market pressures have been more decisive in the trend along with inflationary pressures on maintenance costs.”
Tags:
Legislative Changes for UK Landlords, Managing Landlord Costs in the UK, Rising Interest Rates Impact on Rents, the dps, UK Landlord Rent Increases, UK rental market analysis
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Member Since September 2015 - Comments: 31
11:25 AM, 31st October 2023, About 2 years ago
I read this as ‘60% of landlords have not increased rents within the last 12 months’. What worries me is that many landlords don’t reveiew their rents often enough and when they do they often hit the tenant with one massive increase in one hit, rather than several small increases over several years.
Member Since September 2023 - Comments: 173
2:56 PM, 31st October 2023, About 2 years ago
Reply to the comment left by Gary at 31/10/2023 – 11:25
When inflation was under control, I didn’t raise rents very often, if at all. My tenants would choose a fixed term of 3 years with rent fixed for 3 years.
Of course, when the fixed term ends, rents will be reviewed to account for inflation. This may mean a 20% increase but it is what it is.
Member Since February 2016 - Comments: 1056
3:09 PM, 31st October 2023, About 2 years ago
Well, what do you know? Landlords, just like every other business, have to raise their prices when their costs increase!
Member Since June 2019 - Comments: 761
4:08 PM, 31st October 2023, About 2 years ago
I eagerly await their report on the denomination of the Pope.