Landlords looking to up rents

Tax and regulatory changes to the buy-to-let market is putting financial pressure on landlords and many are being forced to hike tenants’ rents.

A recent study revealed two million tenants across the UK could be hit with rises totalling £46 million as 40% of landlords said they would increase rents in 2018.

Meanwhile, Only 10% of landlords said they would definitely have to sell their property because of the impending ban on tenant fees plus the loss of mortgage interest relief. According to the report, experts predict rents could increase by 2.5% in 2018, which would add an additional £23 to the average monthly rent which already stands at £918.

In London, where the average rent is £1,274, the impact would be more severely felt as 50% of landlords in the capital said they would hike rents. In the North East of England and Scotland tenants would also be badly affected, with 46% and 45% of landlords respectively saying they would be forced to increase rents.

The study has shown that half of the UK’s landlords are small landlords who only own one property. These landlords generally operate on very tight margins and recent changes introduced by the Government have put a lot more pressure on them financially. This means they will have no choice but to consider these rent increases in 2018 which will negatively affect tenants.

Figures showed the increases would disproportionately affect the younger generations as the majority of UK tenants – nearly 60% – are aged between 18 and 34. But nearly all of landlords questioned said they thought it was important to keep tenants happy and said the rent increases were a last resort. Rents have already been increasing year on year, and it’s likely that 2018 will be the year that sees UK tenants feel the biggest impact yet from the recent changes introduced to the private rental sector.

Makes you wonder if the Government have really thought these changes through as this is not the effect they wanted to achieve.

If you are looking for a new or re-mortgage, please do make contact and one of our team of advisers will be happy to help.