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A number of landlords subsidise good tenants by renting at below market rates

Rent increases during the last five years have been less than initially perceived, tracking the retail price index (RPI) in England and Wales, with many landlords even prepared to subsidise good tenants by renting at below market rates, according to a new Allsop report.

Allsop’s latest issue of the Rent Check, a barometer for the rental market in England and Wales published with BDRC, analysed annual rent rises in the five years to March 2018 across different regions and property types, and found that of 54 combined data points, 32 lay below RPI and 22 above, revealing annual rent increases were closely tied to the rate of inflation.

The report suggests that rent rises have been relatively moderate due to affordability levels, which have been affected by the rising cost of living and stagnant wage growth over the last decade.


The study also found that rent levels have also been tempered by a high number of landlords letting properties at below market rate to keep tenants.

Some 59% of landlords surveyed declared they are letting at least one property at below local market levels.

Paul Winstanley, partner at Allsop, said: “Shattering the myth of rent rises greatly outstripping inflation, research has revealed rents have in fact risen moderately at a rate close to RPI over the last five years.

“Landlords have also been prepared to accept lower rents for good tenants. This, and past commitment by landlords to invest in the supply of buy to let property, have helped keep rent rises sustainable.”

An additional fact in stabilising rent levels has been good PRS supply, which has kept up with the growing demand for rental accommodation. However, that could be about to change.

The report says that a policy cocktail of PRA changes, including the phasing out of mortgage interest tax relief and newly proposed three-year minimum tenancies, could have an adverse impact on future supply and result in a significant rise in future rents.

Winstanley added: “Although most landlords are committed to the sector and are not likely to sell-up and leave anytime soon, government policy is likely to make life difficult for them in the longer-term. This risks the supply of much needed housing, which can’t be met by the build-to-rent sector and homeownership alone.”

The ‘Landlords Panel’ research programme feeds a range of statistics to the Rent Check report, which shows that 85% of landlords surveyed are currently making a profit, a figure that has not changed since early 2017.

“Despite the uncertainty surrounding the impact of policy, a substantial number of landlords will remain in the sector and are unlikely to leave any time soon, with 41% of landlords rating the outlook for their portfolio as good or very good for the next quarter,” said Mark Long, research partner at BDRC.

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Poll: Are you currently letting a property at below market rental rate in order to keep good tenants?


  •  G romit

    S.24 is changing all this as Landlords costs are skyrocketing due to this stealth tax, and is forcing Landlords to pass on this added costs through higher rents..

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    i have many really good tenants, but do to increased costs being placed on us by local and central government there will be increases.

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    I’ve been saying this for years, arguing with haters, and never raising rents on existing tenants such that mine were 20% or more BMV. S24 has changed all that such that mine are still BMV but have increased by £150-200 per month over the last couple of years. It’s madness, but the idiots in charge are hell bent on creating more of it!

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    The trouble with reports like these are they are so out of contact with current professional landlords who run their letting of their properties as a business and whilst we do not want to put up rents we are not a charity and have to in some cases to stay in business.
    Today I have received letters from my Mortgage lenders showing Increase in Mortgage payments this will immediately be passed onto my tenants.
    The report is also flawed I would say a good percentage of professional landlords have had enough of the stupid silly rules and regs put out by councils who don't apply them to their own properties and are selling up.
    With partners I owned over 50 and myself manager a further 20 or so on top. Been selling off for past 3 years when the writing was on the wall that we are not wanted.
    With council rules and increase licence fees and government removing tax advantages and increasing Stamp duty and considering it again, I'm getting out of this business (game).
    The government only want corporate companies offering rental properties as they can control them and even put their own MP on the boards, another good money earner for them.

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    I see that Radio 5 Live are having a right go at landlords on their morning programme today.
    Of course the vast majority of callers are slating the rents that are charged, with very limited feedback from landlords.
    I am in a situation where I used to get £650 per month for a 4 bedroomed maisonette 20 years ago and now I can rent it for only £585. Also, the tenants are failing to pay the rent so I have had to issue them with a notice to quit. I have spent over £20,000 on the property in the past two years, but this is never considered.
    I am finding that it is impossible to put up rents down here, where the market is driven purely by affordability, but my costs are increasing year on year.
    When my two daughters finish their education, I would like to think that I would then be in a position to sell up, but then there is the dreaded capital gains tax to consider?
    We seem to be getting bashed from all sides at the moment.


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