Growing costs force landlords to consider rent rises

More than 40% of landlords are likely to increase rent on one or more properties during the next year despite tenants’ ability to pay rent being their number one concern.

A HomeLet/Dataloft survey of 1,000 landlords found that over half of them would be raising rent to cover their increased costs while an additional third would do so in response to market pressures. Concerns about the abolition of Section 21 notices and other taxation or legislative issues also rate highly.

Top concern

However, the study found that 36% of landlords have no plans to increase the rent on any of their portfolio over the next 18 months – no doubt a relief to the 78% of renters who are worried about how they will pay their rent. In the firms’ other study of 12,000 renters it is ranked by one in four as their top concern in the next year, closely followed by worries about landlords increasing rent.

HomeLet CEO Andy Halstead says landlords know the pressure on tenants, but sometimes have to put rent up due to growing costs. “There simply isn’t enough housing stock,” he explains. “Many landlords are choosing to exit the market, which only causes further strain on stock levels and letting agent businesses.”

Rough ride

Adds Halstead: “The government’s commitment to legislation in the market through the Renters’ Reform Bill will provide the most significant change to rental law in a generation and I can’t see any positives. We are in for a rough ride.”

Dataloft MD Sandra Jones believes lessons can be learned from the build-to-rent sector where providers understand the importance of consistently managing customer expectations. “They use their scale and resources to negotiate with utility suppliers, offering greater security and cost predictability,” she adds. “With costs and concerns rising, this is a time when all renters will value a professional and engaged relationship with their landlord.”