ARLA’s prediction that landlords will implement rent rises rather than pay the government-imposed additional costs of running their rental properties is already turning out to be true, it has been claimed.
As the Tenant Fees Bill makes its way through parliament agent MakeUrMove reckons renters will pay an extra £23 a month ahead of the new law kicking in next year as 40% of landlords are forced to raise rents.
The landlords affected are mainly those with a single property and who are running the tenancy on tight margins, the agent says.
As well as landlords soon being expected to pay the additional costs of referencing, inventory checks and contract renewals, many are planning to increase rents to cover the recent extra income tax and Stamp Duty burdens forced on them by the government.
These rises will impact some two million tenants this year, it is claimed. But the impact will be heaviest in London, where half of the landlords MakeUrMove canvassed said they were planning to increase their rents.
But it’s not much better outside the capital. The research also shows that, for example, in the North East 46% of tenants will see rent rises this year, while 45% will in Scotland.
“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,” says Alexandra Morris, managing director of MakeUrMove (pictured).
“From our experience, we know many tenants are already stretching their monthly budgets to afford rental properties, and additional rent increases could be the final straw, tipping them into debt or rent arrears.”
The research also suggests that 10% of landlords will sell their properties rather than struggle to make tenancies break even, which would involve some 450,000 properties.