Two million tenants across the UK could be hit with rent rises in 2018 as 40% of landlords are planning to increase what they charge in the private rented sector, new research suggests.
If this number of landlords carry out their plans that would mean rent rises totalling some £46 million a month, according to the figures from online letting agent MakeUrMove.
With the average rent just over £900 a month, the firm says that a rise of 2.5% would mean tenants paying some £23 a month more, totalling £414 across a typical 18 month long tenancy.
Tenants will feel the impact most severely in London where the average rent is £1,274, as half of landlords say they are planning to increase rents in the capital.
In the North East and Scotland tenants would also be considerably worse off with 46% and 45% of landlords respectively saying they will be forced increase rents due to new laws and regulations.
Despite negative perceptions to the contrary, nearly all, some 97%, of landlords surveyed by MakeUrMove believed it was important to keep tenants happy, suggesting rent increases are a last resort.
‘Rents have already been increasing year on year, and it’s likely that 2018 will be the year that sees UK tenants feel the biggest impact yet from the recent changes introduced to the private rental sector,’ said Alexandra Morris, managing director of MakeUrMove.
‘From our experience, we know many tenants are already stretching their monthly budgets to afford rental properties, and additional rent increases could be the final straw, tipping them into debt or rent arrears,’ she warned.
The research also suggests that rent increases will disproportionately affect younger generations, with figures from MakeUrMove showing that 58.9% of tenants are aged 18 to 34.
‘Our study has shown that half of the UK’s landlords are small landlords who only own one property. These landlords operate on very tight margins and recent changes introduced by the Government have put even more pressure on them. This means they will have no choice but to consider these rent increases in 2018 which will negatively affect tenants,’ Morris explained.
‘The value of these landlords cannot be underestimated, they are central to the UK’s rental sector and add valuable capacity to the market, and the Government needs to recognise this and start to support them, for the sake of the UK’s millions of tenants,’ she added.
In addition to the implications on rents, the research also revealed that 10% of landlords say that would definitely have to sell their property due to legislative changes, potentially affecting 450,000 tenants.