Rent rises are falling below the level of inflation
Rental price inflation in the UK has now fallen below the general rate of inflation, measured by the consumer price index, as an increasing number of BTL landlords realise that tenants are or have already reached their maximum affordability.
A new report released by Homelet shows rents increased by a year-on-year average of 0.8% last month, below the level of inflation which reached 1.8%.
The UK’s average rent for tenancies in February was £895 per month compared to £888 in the previous year, according to Homelet’s figures.
Research carried out has shown that over half of the landlords surveyed by Homlet may have no option but to increase rents in line with the rising cost pressures related to the imminent tax charges due to take effect in April. However, 29% of those landlords advised they may defer their plans to increase rents to 2018.
The survey also found that landlords are aware of the need to ensure rents are affordable for tenants in order to keep a good working relationship with their existing tenants.
Chief executive of Barbon Insurance Group (HomeLet’s parent company), Martin Totty commented: “In recent months, we have seen landlords treading very carefully with rental price rises, amid concerns about tenants’ ability to pay. With more than one in five landlords [21%] blaming an increase in their tax liability for raising rents, it remains to be seen if this can sustain.
Landlords will hope the Chancellor does not make it harder for them to continue supporting their tenants in this way, with further changes to the tax system or legislation, as he prepares to unveil his Budget on the 8th March.”
Full article available on LandlordTODAY: https://www.landlordtoday.co.uk/breaking-news/2017/3/private-sector-rents-rise-below-inflation