89% of landlords expect to raise rents in the next 12 months
Nearly half of buy-to-let landlords in the UK intend to increase rents ahead of the incoming Renters’ Rights Bill, according to new research by Landbay. The survey found that 44% of respondents plan to raise rents as a direct response to the legislation.
Landlords with mid-sized portfolios are among the most likely to act. Of those citing the Renters’ Rights Bill as their reason for increasing rent, 32% own between four and 10 properties, while 28% hold between 16 and 30. Regionally, properties in the South East are most at risk of rent rises, followed by those in the North West.
These rent increases, which are being implemented in anticipation of the bill, average around 6%, equating to an additional £74 each month. This sits well above the current private rental inflation rate of 3.6%, based on figures from the Office for National Statistics.
Under the new rules, landlords will be restricted to one rent increase per year, and only up to the market rate, the amount a property would fetch if newly listed. Tenants will have the right to challenge rent increases at a first-tier tribunal if they believe the rise surpasses market value.
The move to raise rents ahead of the legislation is partly a response to concerns about the cost impact of upcoming changes. Many landlords remain wary of proposed reforms, especially the scrapping of Section 21, which currently allows them to evict tenants without stating a reason. In an earlier Landbay survey, 75% of landlords voiced concerns about losing this option and the potential difficulty of managing problematic tenants.
The outlook over the next year remains challenging for renters. The survey showed that 89% of landlords plan to increase rents in the coming 12 months. More than one-third intend to raise rents by between 3 and 10%, while only 11% said they have no plans to implement any increases.
“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," comments Landbay's sales and distribution director Rob Stanton (pictured). "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."
He added, “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.”
"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"
