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Financial pressures mean that 40 per cent of buy to let investors say they have been forced to increase rents in 2018.
Nationwide, these rent increases will amount to £46 million. The average UK rent already stands at £918, with experts predicting a further rise of 2.5 per cent in 2018.
Landlords have been facing increasing financial pressure as regulations mount. For example, the impending ban of tenant fees, loss of mortgage interest tax relief and regulatory changes have all combined to create financial pressures on landlords. This will leave nearly half of them with little choice but to raise tenants’ fees to cover their costs.
Online letting agent MakeUrMove has thus predicted that tenants could end up paying £23 per month more, amounting to £414 across a typical 18 month tenancy. This will have the most severe impact on those renting in London, as half of the landlords in the capital have said that they will need to raise rents, which are already particularly high at an average of £1,274 per month.
The impact will also be felt in the North East and Scotland. 46 and 45 percent respectively of landlords in these areas will be forced to increase rents.
Managing director of MakeUrMove, Alexandra Morris, said: ‘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. 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.
‘Our study has shown that half of the UK’s landlords are small landlords who only own one property. These landlords operate on very tight margins and recent changes introduced by the Government have put even more pressure on them. This means they will have no choice but to consider these rent increases in 2018 which will negatively affect tenants.’
She continued: ‘The value of these landlords cannot be underestimated, they are central to the UK’s rental sector and add valuable capacity to the market, and the Government needs to recognise this and start to support them, for the sake of the UK’s millions of tenants!’