Landlords forced to increase rents by an average of £23 per month
Tenants face paying an average of £23 a month more in rent, totalling £414 across a typical 18-month tenancy, as the average monthly rent of £918 is set to rise by 2.5 per cent in 2018.
Two million tenants across the UK will be hit with rent rises totalling a combined £46 million a month, according to our recent research which demonstrates 40 per cent of landlords will be forced to increase rents in 2018.
The impending tenant fees ban, loss of mortgage interest tax reliefs and regulatory changes have all combined to create a perfect storm of financial pressures on landlords, leaving nearly half of them with no choice but to hike up tenants’ rents to cover their costs, pilling the pressure on tenants already struggling with stagnant wages and the rising cost of living.
Tenants will feel the impact most severely in London where half of landlords say they are planning to increase rents, piling extra pressure on tenants who are already paying an average monthly rent of £1,274.
In the North East and Scotland, tenants will also be badly affected, with 46 and 45 per cent respectively of landlords in these areas say they will be forced increase rents due to new laws and regulations.
Despite negative perceptions to the contrary, nearly all (97 per cent) of the landlords we surveyed believed it was important to keep tenants happy, suggesting rent increases are a last resort.
Alexandra Morris, managing director of MakeUrMove said: “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. From our experience, we know many tenants are already stretching their monthly budgets to afford rental properties, and additional rent increases could be the final straw, tipping them into debt or rent arrears.”
The increases will disproportionately affect younger generations, with the majority of UK tenants (58.9 per cent) are aged 18-34.
Morris added: “Our study has shown that half of the UK’s landlords are small landlords who only own one property. These landlords operate on very tight margins and recent changes introduced by the Government have put even more pressure on them. This means they will have no choice but to consider these rent increases in 2018 which will negatively affect tenants.
“The value of these landlords cannot be underestimated, they are central to the UK’s rental sector and add valuable capacity to the market, and the Government needs to recognise this and start to support them, for the sake of the UK’s millions of tenants!”
In addition to the implications on rents, the research also revealed that 10 per cent of landlords would definitely have to sell their property due to legislative changes, potentially leaving 450,000 tenants having to find a new home.