Landlords set to raise rents as costs increase

Landlords set to raise rents as costs increase

0:05 AM, 10th July 2024, About A week ago 29

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Landlords across the UK are planning to raise rents in the next year, with nearly 85% expecting to do so, research reveals.

A new survey by Landbay reveals a big shift from previous years, where rent rises were primarily driven by high demand for rented homes.

However, rising interest rates and operational costs are now the main factors behind rent hikes.

‘Higher interest rates and operating costs’

Rob Stanton, Landbay’s sales and distribution director, said: “Whereas before, rising rents would often reflect the increasing demand for good quality rental accommodation, today’s market now means landlords also have to factor in higher interest rates and operating costs too.

“With no alternative, many landlords have to consider increasing rent to cover their outgoings.”

He added: “As a large number of landlords look at their remortgage options, they can be encouraged by the innovation we have seen from lenders across the buy to let market.”

42% of landlords planning increases

The survey found that 42% of landlords planning increases manage portfolios of 4-10 properties.

Notably, a significant portion (16%) pay more than 13% of their rental income on property management fees.

Just under a third (30%) pay 5% of their rental income, while slightly fewer (29%) pay between 9% and 12%.

Landbay says that a third (36%) of landlords are looking to put up rents by up to 5%, and 37% are planning to increase by between 6-10%.

A smaller group of landlords (8%) say they are anticipating increases of 11-19%.


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Cider Drinker

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16:57 PM, 10th July 2024, About A week ago

I’m a landlord. Normally, I’d want my tenants to be happy and to stay forever. That’s how being a landlord works. I don’t see myself as a property investor.

What makes me want my tenants to leave is government meddling with the Housing Act. I based my decisions to buy property on the rules in 2001. Government shifting the goalposts unreasonably is a prime reason for rent increases and landlords leaving the sector (and therefore, tenants being evicted).

JB

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17:04 PM, 10th July 2024, About A week ago

Reply to the comment left by Cider Drinker at 10/07/2024 - 16:57
Yep. I've spent 20 years making tenants comfortable and wanting to stay and I may have shot myself in the foot if I can't get them to leave!!

Shelly Feay

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16:22 PM, 11th July 2024, About A week ago

A lot of landlords raised the rents in April. I'm on uc groups and many tenants have said they can't afford the rise already, and a lot have become homeless as a consequence. There is no point in keep raising rents and having empty properties because tenants cannot afford to pay, or tenants living in properties they aren't paying rent on. What needs to be done is mortgage rates for landlords brought down. If interest rates weren't going up so much then landlords wouldn't need to recuperate the extra from tenants. If the government aren't willing to build enough social housing then they should bring in a scheme to compensate private landlords for them to be able to give affordable housing themselves, without losing money. No one should have to rent their properties out on a loss, but no one shouldn't be able to afford to rent either.

Beaver

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17:19 PM, 11th July 2024, About A week ago

Reply to the comment left by Shelly Feay at 11/07/2024 - 16:22
I agree that the government and Bank of England need to understand that raising interest rates will force landlords to raise rents, or force landlords to divest their properties if they are losing money.

But I'm not seeing empty properties in my area; there is a queue for them and tenants are outbidding each other to get them. And I don't know any landlords who want tenants to live in their properties if they are no longer paying rent. Most landlords are concerned with having to go to court to get their properties back and this taking far too long.

I did have a tenant complain about a rent increase last year because she said she couldn't afford it..one of the neighbours said the family had just come back from holiday in America.

Alison Clark

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8:28 AM, 13th July 2024, About 7 days ago

Reply to the comment left by Beaver at 10/07/2024 - 11:37
I’m the same🤦‍♀️. I think it’s….. as long as the tenant has been in the property 2 years regardless of any new tenancy agreements? 😊

Alison Clark

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8:47 AM, 13th July 2024, About 7 days ago

Reply to the comment left by JB at 10/07/2024 - 16:27
Gosh this one re 2 years is confusing. Hopefully some clarity heading our way soon!

Just on AST can LL change/add terms quite freely?

On a separate note. My letting agent had never heard of a deed of surrender!!!! My tenant has expressed to leave early from fixed term. Surely a DS needs to be in place if/when he leaves!

Fraser Hopewell

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20:02 PM, 14th July 2024, About 5 days ago

Reply to the comment left by Cider Drinker at 10/07/2024 - 11:40
The affordable housing is in reality subsidised from the sale of the non affordable homes sold, in addition the affordable homes in a development will be different from affordable ie the finishes internally and externally (eg no balconies smaller windows) the location within the development (eg LGF) also they don’t necessarily have to be on the same development they could be in a less “desirable” area (eg not on the river, close to station) all in all its just a tax on developers

Stella

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23:08 PM, 14th July 2024, About 5 days ago

Reply to the comment left by Alison Clark at 13/07/2024 - 08:47
Does not sound like a good agent.
What else does he not know?

Alison Clark

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7:14 AM, 15th July 2024, About 5 days ago

Reply to the comment left by Stella at 14/07/2024 - 23:08
Hi Stella. Exactly, I’m double checking everything on Google, plus on this platform. I’m grateful to everyone who replies. Thank you.

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