Increased demand and rising cost of maintaining property has led to rental rises
Increased demand and the rising cost of maintaining property mean private tenants in the UK are likely to face a rise in rental rates this winter, it is claimed.
One in five of landlords also claim their arrears have increased compared with the previous quarter, according to BDRC Continental’s quarterly Landlords Panel research.
It found that almost half, 45%, have increased rents in the last 12 months, while over a third, 34%, said they are likely to do so in the next six months. Landlords cite the strength of demand and the increased cost of running a property portfolio as the main drivers for rent rises.
Young couples, singles and Local Housing Allowance (LHA) claimants are the groups potentially most likely to be hit by rent rises in the private rental sector. When asked which groups of tenant they let to, landlords indicated that young couples and young singles account for the greatest proportion of their tenants, while LHA could also likely to be affected, as 37% of landlords cater for this segment of the market.
The potential rent rises are predicted at a time when almost half of landlords have experienced rental arrears in the last three months and almost three quarters, 72%, of those who have sought possession of their rental property were driven to do so by rent arrears. Other reasons for seeking possession include anti social behaviour, which contributed to nearly half of possessions. However, one third of landlords have never sought possession of their rental property and landlords wait an average of almost four months to obtain possession and pay £866 in legal fees alone.
‘Like everyone who owns a home, landlords face the increasing costs of maintaining property and the impact of this is clearly being felt. With a background of Local Housing Allowance rates being capped and a restricted amount of finance available via buy to let mortgages, it’s unsurprising that private sector rents are likely to increase by almost 5%,’ said Mark Long, Director for BDRC Continental.
Meanwhile a new comparison website has been launched to give sellers and landlords a snapshot of what agents can offer and says it will bring transparency and competition when it comes to estate agency fees and marketing tools, which in turn means the best deal for sellers and landlords.
The site, ipostcode.com says that it can be difficult to find out beforehand what agents charge and most people don’t really know what they should be paying an agent or that some fees are negotiable.
It wants estate agents to be upfront and transparent about their fees and any sole agency tie in clauses, as well as providing further information on their services and marketing options both online and offline that they would use to sell or let the property.
‘Agents can be too guarded about how much they charge. We want to lift the lid on estate agency fees and make the process more competitive, encouraging them to pitch upfront for the business,’ said cofounder Domenic Versace.