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Fears that London landlords will be forced to raise rents as a result of increased regulation are becoming reality, with 49 per cent of London landlords increasing prices.
Increased financial pressure and new legislation have led to London landlords being forced to increase their rental prices to remain afloat. Up to 898,000 tenants in the capital will be affected by the changes, according to online letting agent MakeUrMove.
Figures released by Rightmove have revealed that London has seen a larger increase in rental prices in comparison to anywhere else in the UK for the first time in over three years. Prices in the capital have growth to an average of £2,000 per month in the second quarter of this year. This marks a 3.4 per cent increase in comparison to the previous year.
Rightmove has argued that the rent rises are due to landlords exiting the market coupled with a lack of new supply in the London market.
Data compiled by MakeUrMove confirmed this, finding that 51 per cent of London landlords were considering selling their rental properties due to changes to the housing market. It appears that many have followed through with this plan, leading to a limited supply of rental property and therefore rent increases in the capital.
Managing director, Alexandra Morris, MakeUrMove commented: ‘The lettings industry has continually been warning the government that the changes they’ve introduced to the private rental sector such as the loss of mortgage tax reliefs, additional regulations on landlords and the looming tenants fees ban, would have unintended consequences such as rent increases, and that is now happening in London.’
This increase in rental prices in the capital should ring alarm bells. Action must be taken to ensure it remains financially viable for tenants to rent properties and for landlords to meet their financial obligations.’