Landlords may be forced to rein in rent rises


Fri 23rd Mar, 10:00:00 GMT

The rental income enjoyed by landlords has been steadily rising for some time, as property owners look to make the most of an increasing pool of tenants in the UK.

But such hikes in monthly returns may not be able to continue forever, one expert has warned, as the ability of dwellers to pay is being compromised.

David Lawrenson, private rented sector expert at LettingFocus.com, explained there has been between 18 months and two years of consistent rises in rents across the UK. While he noted the extent of this is largely dependent on location – with London witnessing particularly hefty increases – the trend has certainly hit consumers hard.

He added that prior to the recent boom, rents were typically rising below the rate of inflation. This perhaps makes now a good time to get into the landlord market, with rates at a high point.

But anybody planning on buying an investment in property with the intention of letting it out should also be aware that growth in rental values may be stunted in the years to come.

"If tenants say that they can't pay it or if landlords find that there are more of them going into arrears, then they will either do one of two things," Mr Lawrenson stated.

"Firstly, they would have to restrain the rent increases in future or, secondly, be even more picky about the tenants that they have, to try to avoid those that are likely to go into arrears."

Landlords could also try to justify hikes in the rental price of their abodes by investing in home improvements, such as hiring a builder to create an extra bedroom. This would result in a property being more valuable, as it may potentially attract a family rather than singletons.

Mr Lawrenson went on to suggest that there have been "mixed reports" in the last two months about the future of the rental market.

Those who believe rents will be frozen over the coming months largely do so because of the economy. The Consumer Credit Counselling Service recently said that renters have been affected more than anybody else by the tricky financial position the country finds itself in.

But there are others who think this may not be the case. Either way, it is important for landlords to keep their homes filled with tenants in order to ensure their venture pays off and thrives in the long run.

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