Rental price inflation in the UK has fallen below the general rate of inflation, according to the latest data from the HomeLet Rental Index.
During February rents were just 0.8 per cent higher year on year, falling far below the general inflation rate of 1.8 per cent according to official statistics. This trend of stability was also evident in the capital, with rents in Greater London remaining unchanged over the year, up just 0.4 per cent in comparison to February 2016.
In contrast to general expectation, the balance of landlords appear to be focusing on affordability, with 48.5 per cent claiming that they have no plans to raise rents, in spite of rising costs.
They survey highlighted a dilemma for landlords. Factors such as the imminent tax changes, coming into practice in April mean that costs could soon spiral. However, many are acutely aware of the need to ensure rents are affordable for tenants, and hope to maintain a good relationship with them, something which could be antagonised by excessive rent inflation. 96 per cent of the landlords surveyed reported that they were happy with their current tenants.
However, the influx of new regulation does appear to have unsettled the sector. For 31 per cent of landlords, the prospect of further changes in legislation is their biggest concern.
HomeLet’s Chief Executive Officer, Martin Totty commented: ‘Our research again demonstrates that the vast majority of landlords have positive working relationships with their tenants. In recent months, we have seen landlords treading very carefully with rental price rises, amid concerns about tenants’ ability to pay. With more than one in five landlords blaming an increase in their tax liability for raising rents, it remains to be seen if this can sustain. Landlords will hope the Chancellor does not make it harder for them to continue supporting their tenants in this way, with further changes to the tax system or legislation, as he prepares to unveil his Budget on the 8th March.’