Some 44% of the UK’s Buy To Let landlords plan to put up rent in response to the new Renters’ Rights Bill, new survey data from Landbay can reveal.
Of those who are raising rents specifically because of the Bill, landlords with portfolios of between four and 10 properties are most likely to increase rents (32%), closely followed by those with between 16 and 30 properties (28%).
Properties in the South East are most likely to be impacted, followed by those in the North West.
Those taking action ahead of the Renters’ Rights Bill will increase rents by 6% on average – that’s above the government’s tally of 3.6% general inflation. This will add an additional £74 per month on to the average monthly rental figure.
Under the Renters’ Rights Bill, landlords will be limited to just one rent increase per year to the market rate – the price that would be achieved if the property was newly advertised to let.
Tenants however have the opportunity to challenge this at a first-tier tribunal if they believe it exceeds market rate.
The decision to pre-emptively increase rents reflects not just the potential cost implications of new regulation, but the continued uncertainty among landlords around the planned removal of Section 21 evictions. In a previous survey conducted by Landbay, 75% of landlords expressed concerns about the removal of Section 21 and their ability to remove problem tenants.
Rob Stanton, sales and distribution director of Landbay, says:“This sharp rise in rents in the short term shows the unintended consequence of this new regulation, as landlords look to act now and pre-emptively raise rents in fear of future cost implications or difficulties, and to protect their investments. By forcing the hand of landlords in this way, there is a real risk of worsening the cost-of-living crisis that so many private renters are currently facing.
“Any good and reasonable landlord will agree with protecting the rights of tenants, but they also believe that the rights of the property owner should be protected too. There’s no doubt we need to balance reform with support and safeguards for landlords to make sure that the rental market continues to play the important role it does in the UK’s housing mix. While we may not be able to influence government policy or regulation, our role as a BTL lender is to ensure our product range is competitive and delivers exactly what landlords need – whether that’s for purchases or refinancing.”
The vast majority of landlords (89%) intend to raise rents in the next 12 months. While more than a third plan to increase rents between 3% and 10% over the next 12 months, some 11% say they do not plan to put up rents at all.
