Rents could increase by 20% over the next year – HomeLet

Rents could increase by 20% over the next year – HomeLet

0:05 AM, 8th May 2024, About 2 months ago 7

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The UK’s renters are facing rents climbing at an alarming rate this year after they rose by 1.6% in just one month, marking the fourth consecutive rise, data reveals.

The latest HomeLet rental index shows the average tenant is now paying an extra £21 per month compared to last month.

However, the situation is even more severe in London, where rents have rocketed by 3.1% – or £65pcm – in the same period.

This means Londoners are forking out nearly 40% of their wages on rent, while the national average sits at 33%.

Could see rental prices increase by almost 20%

The firm’s chief executive, Andy Halstead, said: “A trajectory like this could see rental prices increase by almost 20% over the next 12 months, which would be the equivalent of over £250 more being paid out each month by the average UK tenant.

“This puts the country in a clear ‘cost of renting crisis’ and the Government must act to provide landlords and tenants with the clarity they so desperately need.”

The firm also says that the slow progress of the Renters (Reform) Bill through Parliament is ‘prolonging the chaos’ in the private rented sector.

‘The scrapping of Section 21 notices’

Mr Halstead said: “Over the course of the last five years, since the scrapping of Section 21 notices was first mooted by the Government, the PRS has become increasingly more chaotic.

“While this is just one issue among many that fuels the chaos, ministers need to understand that uncertainty and delays to important legislation like the Renters (Reform) Bill create uncertainty.

“That leads to landlord churn and market volatility.”

He added: “Figures from HMRC show 139,000 taxpayers reporting 151,000 disposals of residential property in the 2022/23 tax year, amassing a total liability of £1.8 billion.

“This is much larger than two years previously.”

He says that rental stocks are falling, and tenants are now competing for fewer properties.

He added: “Until a clear date for the abolition of Section 21 notices is confirmed, many more landlords are likely to lose patience and sell up altogether.

“This will only inflate rental prices further – a situation the country can scarcely afford.”

Cost of living crisis showing no signs of easing

HomeLet’s figures highlight that the cost-of-living crisis showing no signs of easing and its data contradicts Bank of England predictions of a drop in inflation so renters may not see any relief soon.

Over the past year, rents have risen by 7.9% across the country – and by 35.8% compared to pre-pandemic levels.

Outside of London, only tenants in the East Midlands didn’t see a rent rise, while those in the South West saw rents increase by 0.4%, and by 2.9% in the North East.


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Comments

GARY RIVETT

11:18 AM, 8th May 2024, About 2 months ago

I have been a responsible landlord now for 18 years and have a modest portfolio of 8 rental properties. I currently have "fantastic" tenants in all my properties and would not wish to lose any of them, however, when the abolition of section 21 comes into law, the question is, will my tenants remain "fantastic" or will they become belligerent, knowing that in effect, I have lost control of my property. I recently had a tenant leave one of my properties (DSS), I had granted permission for her to have a dog, she had come from an agency and I had had an inventory done prior to her moving in. When she moved out, I paid for another inventory and was dismayed to find out that she had destroyed 3 carpets, had allowed her daughter to draw with wax crayoning over most of the walls in the property, had also damaged the kitchen, and had left 2 wheely bins full of dog excrement outside along with broken toys and other mess, the total cost of rectification was over £4,000, this was if I did most of the work myself to cut contractors costs (I had supplied contractors quotes), I applied to the TDS to be allowed to retain the deposit of £700, this was refused, and I was awarded £40 of the deposit only and was informed that I could not appeal this decision, this effectively cost me more than the total rent received for the entire tenancy. What is the point of taking a deposit? and the powers that be, decide in their wisdom that landlords need further sanctioning, it is completely bewildering. Now we cannot even claim tax relief on the mortgage payments of the properties we rent out, how is this not a business expense, can somebody explain this to me, please? Are there any other businesses where you cannot claim for legitimate expenses? I don't know of any myself. If anybody who reads this post is thinking of coming into the PRS, I would advise that you seriously think very hard before you do so as I know that my experiences are not uncommon (I have had far, far worse). Good luck guys.

PAUL BARTLETT

11:39 AM, 8th May 2024, About 2 months ago

"I applied to the TDS to be allowed to retain the deposit of £700, this was refused, and I was awarded £40 of the deposit only and was informed that I could not appeal this decision"
The TDS is a scam that applies the avoidance of betterment to the extreme as an anti landlord bias with no consideration for preservation of the property condition less fair wear and tear.
So property inspection costs are a pointless expense as TDS will never provide realistic reinstatement costs.
Any system without right of appeal will be corrupt.

Other Deposit schemes are available..

GARY RIVETT

12:58 PM, 8th May 2024, About 2 months ago

Yes, I agree. I don't take deposits anymore, I just assumed that all deposit schemes are the same, I increased how much I would normally ask for rent to cover potential damage and save that amount, so the corrupt deposit scheme designed to protect tenants has cost tenants more. The same as all the other landlord-hating schemes, past and future.

GARY RIVETT

13:19 PM, 8th May 2024, About 2 months ago

Look, as I see all this, Landlords/ladies are landlords/ladies to make a profit. If we are sanctioned and have stupid costs and rules imposed on us, we have only 2 choices, we increase the rent to make it worth it to us or we sell up, that's it.
Nobody in their right mind or a philanthropist would do otherwise. Why is it so hard for the landlord/lady haters to see this?
Maybe I should have been a politician.

Cider Drinker

13:30 PM, 8th May 2024, About 2 months ago

Recent rises are because rent increases lag behind increased costs for landlords.

If the rate of rises in landlords’ costs eases, rent increases should ease too (in a few months’ time).

However, I fear landlords’ costs will continue to rise due to government policies.

Unless landlords are allowed to make a small profit, they will not be able to fund essential repairs and this is bad news for everyone.

dismayed landlord

14:27 PM, 8th May 2024, About 2 months ago

Reply to the comment left by Cider Drinker at 08/05/2024 - 13:30
History shows the future. Main difference now is that politicians / government have shown that a tenancy agreement contract can be over ridden by governments legislation. Effectively making any contract nul and void.
Best of luck to future landlords . The big corporations coming will be supported by tax breaks and held in high regard. Polly will have won the battles but lost the war.

GlanACC

8:16 AM, 11th May 2024, About a month ago

No they won't increase by 20% because renters simply can't afford it. If they do the only outcome will be more defaults and more court cases to evict (which generally means the tenants will stop paying altogether and sit tight till the bailiffs arrive as they have nothing to lose).

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