Landlords are opting to keep rents affordable so as to retain their tenants, as rental price inflation in the UK falls below the general rate of inflation, a new study reveals.
Research by letting agents, Homelet, has revealed that rents in the UK rose on average by just 0.8% in February, compared to February 2016. The current rate of general inflation is 1.8%.
While the current rental price inflation is well below the general rate of inflation, Homelet’s research did find that over half of the 3,726 landlords surveyed are preparing to raise rents in order to meet rising cost pressures. Although, almost a third of those landlords (or 29%) said that they don’t intend to do this until 2018.
Landlords expect the changes in tax regime, that come into play in April, to impact their overheads, in addition to the rise in costs brought about by the introduction of the Stamp Duty surcharge last year. A dilemma faced by many now lies in the fact that they are also acutely aware of their tenants’ situation, and the need to maintain affordable rents.
The Homelet survey found that further changes in legislation is the biggest concern for a third of landlords (31%) surveyed.
Martin Totty, chief executive officer at Homelet, said:
“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 (21%) blaming an increase in their tax liability for raising rents, it remains to be seen if this can be sustained.
“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.”
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