A poll conducted for the Deposit Protection Service has found that three-quarters of landlords are either in the process of or planning to increase rents for their tenants. This comes as 40% of buy-to-let property owners have already raised rents over the past year, with an additional 35% intending to follow suit in the near future, according to the survey by the tenancy deposit holding firm.
These revelations coincide with the Bank of England’s Monetary Policy Committee meeting scheduled for this Thursday. Over the course of the past year, the committee has increased the base interest rate 14 times since December 2021, though it opted to hold rates steady last month.
Moreover, the survey aligns with the recent statistics from the Rightmove Rental Tracker, which revealed that the average advertised rent for new properties on the market has surged to a new national record of £1,278 per calendar month. This marks the 15th consecutive quarter in which average advertised rents have reached unprecedented levels.
According to the landlord’s poll, a significant proportion of property investors, or 68%, attributed their decisions to increase rents to the rising costs associated with legislation and compliance. Maintenance cost increases were cited by 62% of respondents, while 55% expressed concerns about the growing risks related to potential changes, such as the proposed abolition of Section 21, no-fault evictions, which are currently under debate in the Renters Reform Bill in the House of Commons.
The survey further unveiled that 72% of landlords considered keeping rents in line with their local rental market as an influential or very influential factor in their decision to raise letting prices.
Matt Trevett, Managing Director of the Deposit Protection Service, commented on the findings, stating, “Demand for rental property remains high, and our survey suggests most landlords see a future in the rental market. However, landlords have also told us that their costs have increased recently, particularly as a result of higher interest rates, and it seems a large proportion are raising rents to cover their expenses. Clearly, increases to interest rates and the cost of living will also be affecting some tenants, and we’d encourage both renters and landlords to have an open and constructive dialogue about financial pressures in the current economic climate.”
The rental market landscape is undergoing significant shifts as landlords grapple with rising expenses, and tenants contend with the escalating costs of living. In this climate, the decisions made by landlords in adjusting rental rates may have far-reaching consequences for tenants and the broader housing market.