With added pressure caused by Government changes, the majority of landlords are planning to increase rent this year, a new poll by Simply Business has found.
The poll, which was conducted before the Government released its recent white paper, found that of the 362 landlords polled, 207 of them intend to raise their rents this year.
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Government changes force landlords to up their prices
The last year has seen a number of buy-to-let changes introduced, with very few of them working in favour of landlords.
The changes to Stamp Duty mean landlords will now effectively pay a surcharge when buying new properties, while wear and tear allowance has been changed so that landlords can no longer claim an annual allowance.
In the Autumn Statement, Chancellor Philip Hammond announced the Government’s intention to prevent letting agents from charging tenants certain admin fees, such as the cost of reference checks. Though there’s been no move to enact this particular change, it’s something landlords need to keep in mind when considering rent reviews.
Longer tenancies could make rent reviews more difficult
However, while the Government has given landlords a number of reasons to want to raise rents, the housing white paper they released last week may make it harder to do so.
The paper urges landlords to consider longer term tenancies, ideally at least three years in length. While there are certain benefits to longer term tenancies, it will make it harder to review rent – especially if you don’t have a rent review clause in your tenancy agreement.
There are a lot of things to keep in mind when considering raising rent this year, but the good news is that rental prices are predicted to rise faster than house prices over the next five years, so if you are considering raising rents, you can worry less about pricing yourself out of the market.