Yahoo Finance Record number of landlords raising their rents
Record number of landlords have raised their rents this year with more than half of investors cashing in on fever-pitch demand from tenants.
The share of landlords who raised rents at the end of a tenancy rose to 58pc this year – the highest ever recorded by estate agency Hamptons.
The pandemic has triggered rent rises and bidding wars in rural hotspots which have since spread into towns and cities as people returned to the office.
Prior, landlords who increased rents at renewal were in the minority. In 2019, just a third of homes were re-let at a higher rental price, while in 2012 the share was 40pc. Landlords are most likely to increase rents in the South West, where 68pc of homes were re-let at a higher price this year, Yorkshire and Humber, 63pc and Wales, 62pc.
Tenants in the East and North East of England were most likely to be spared rent rises, with half of landlords raising rents at the end of a tenancy contract.
In the capital 55pc of landlords who signed a new contract with tenants so far this year did so at a higher price, up from 30pc in 2021. However the share is lower than the high of 71pc recorded in 2011.
Nina McDowall, of estate agency Strutt & Parker in Chelsea, London, said rents on new lets and renewals had risen at a “dramatic” rate. She added: "Most landlords are pretty sensible and, especially if they have tenants who have been in the property for a while, will not be too aggressive.
"But others definitely go in all guns blazing. We had one landlord who increased the rent by 45pc for their current tenants, and they paid it. Especially properties which are coming back on the market after a couple of years, these have significantly increased."
This comes as the average rent on a newly let property climbed by 10.6pc in the year to May reaching £1,103 – £106 more than the same month last year, according to tenant referencing company Homelet. In London rents have surged by almost 16pc to £1,832 a month, almost £250 more than in May 2021.
Huge rental price growth has been fuelled by a chronic shortage of available properties, with the average landlord agreeing a new tenancy agreement within 14 days of coming to market.
However, the Government has published plans to overhaul the private rental sector, which would improve tenant rights but leave landlords exposed to additional costs and months of arrears.
Landlords will be forced to rent to people on benefits and reimburse tenants whose homes do not meet new minimum standards, under the reforms. Renters will also get new rights to request to keep pets in their rental properties. The changes come as rate rises on buy-to-let mortgages are already eating into investors’ profits.
