With all the movement around rules and regulations, and the continued financial pressures within the private rented sector recently, many landlords have had to face the decision of increasing rents. Tenant fears have now become a reality, as 49% of landlords in London have gone ahead with this decision.
It has been calculated by online letting agent MakeUrMove that 898,000 tenants in living in the capital will be affected by these rent rises.
With figures from Rightmove showing London to have seen a larger increase in rental prices compared to areas in the rest of the UK for the first time in over three years, tenants are feeling the pressure.
Rental prices in London have now increased to an average of £2,000 per month during the second quarter of this year, resulting in a rise by 3.4% compared to the same period in the pervious year.
Rightmove believes that these increases in rent are related to the current exodus of landlords from the market, as well as a lack of new rental properties becoming available on London’s housing market.
The data that has been compiled by MakeUrMove has revealed that 51% of landlords in London have been considering selling their rental property because of changes in the housing market. Now, however, this consideration has become a reality, resulting in a shortage of property to rent, and, therefore, an increase of rent prices in London.
MakeUrMove managing director, Alexandra Morris, 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.”
It is worth bearing in mind that you do not want to risk raising rents too drastically, as you may find that you’ve left your tenants in a position where they feel unable to keep up with payments. However, Rent Guarantee Insurance is an option for those who are worried about tenant rent arrears.