A recent investigation by The Guardian has shed light on the actions of mortgage-free landlords, revealing that over two-thirds of them have raised rents despite being shielded from interest rate hikes. This revelation comes from a survey commissioned by housing charity Shelter, involving over 1,000 landlords.
The survey disclosed that a staggering seven out of ten landlords who own their rental properties outright increased rents on new or extended tenancies in the past year. This surge in rents coincided with a rise in their average profits to more than £800 per month.
The practice, described as “cashing in” by the newspaper, has led to windfalls for numerous investors, while tenants bear the brunt, paying more despite shrinking living spaces in flats and houses.
Ben Twomey, the chief executive of Generation Rent, criticized these “debt-free” landlords, accusing them of profiting simply because they have the capacity to do so. He emphasized the urgent need for government intervention, warning that without it, the renting crisis would persist, displacing families and exacerbating homelessness.
In response, Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), countered the claims. He cited NRLA data indicating that landlords without mortgages are significantly less likely to hike rents compared to those with mortgages. Beadle also referenced Savills’ data, stating that investor profits, even among those without mortgages, are currently at their lowest in 16 years.
This revelation surfaces within The Guardian’s ongoing series on ‘Living hell: Britain’s rent crisis.’ The series recently featured Clive Betts, chair of the levelling up, housing, and communities select committee, who advocated for courts to have the authority to seize rental properties from landlords who repeatedly flout regulations and exploit tenants. Betts believes this measure would act as a substantial deterrent, preventing landlords from considering fines for unsafe and overcrowded housing as merely a cost of business.