Tax and regulatory changes to the buy-to-let market are putting so much financial pressure on landlords many are being forced to hike tenants’ rents.
Tax and regulatory changes to the buy-to-let market are putting so much financial pressure on landlords many are being forced to hike tenants’ rents.
A study by online letting agent MakeUrMove revealed two million tenants across the UK could be hit with rises totalling £46 million as 40% of landlords said they would increase rents in 2018.
Meanwhile, 10% of landlords said they would definitely have to sell their property because of the impending ban on tenant fees plus the loss of mortgage interest reliefs and regulatory changes which have been introduced recently.
According to MakeUrMove, experts predict rents could increase by 2.5 per cent in 2018, which would add an additional £23 to the average monthly rent which already stands at £918.
In London, where the average rent is £1,274, the impact would be more severely felt as 50% of landlords in the capital said they would hike rents.
And in the North East of England and Scotland tenants would also be badly affected, with 46% and 45% of landlords respectively saying they would be forced to increase rents.
Alexandra Morris, managing director of MakeUrMove, said: “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.”
Figures showed the increases would disproportionately affect the younger generations as the majority of UK tenants – nearly 60% – are aged between 18 and 34.
But nearly all of landlords questioned said they thought it was important to keep tenants happy and said the rent increases were a last resort.
Morris added: “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.”
This is a real no (you know the word) Sherlock moment. I said this as soon as the changes were introduced, in the long run the only people who will have to pay more than anyone is the tenant!