Landlords prepare to raise rents - Money - News - Moneyfacts

News

Landlords prepare to raise rents

Landlords prepare to raise rents

Category: Money

Updated: 04/01/2011
First Published: 04/01/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Tenants could well be hit with rises from their landlords in 2011, with more than four in ten planning on charging more this year.

Research by Paragon Group has revealed that 41% of landlords with property in the private rented sector plan to up the amount they charge their tenants during the next 12 months as a result of strengthening demand.

Only 4% of landlords said they would be reducing the amount they charge, while 55% plan to freeze the amount of rent.

Nearly a third of landlords (30.7%) plan to increase rents by up to 4% of the current value, with 10% aiming to increase the rent they charge tenants by between 4% and 8%.

Rents in the private rented sector rose steadily through last year, with the Royal Institution of Chartered Surveyors (RICS) reporting that more surveyors recorded rent increases than falls in each of the first three quarters of the year.

Latest figures from RICS showed that 34% more surveyors expect a rise in rents than a fall during the fourth quarter.

Landlords' expectations for rental inflation are mirrored by their view of tenant demand over the next 12 months. Just under half (45%) of landlords believe tenant demand will continue to grow during the year, with 44% forecasting that it will stabilise.

"Landlords are in a strong position. Tenant demand has risen faster than supply during 2010 and that is expected to continue well into 2011," said Nigel Terrington, chief executive of Paragon Group.

"This is reflected in landlords' expectations of future levels of tenant demand and also the rent they are planning to charge for their properties. There continues to be a lack of finance available in the UK mortgage market, meaning that many potential buyers are opting to rent instead.

"Meanwhile, many of the factors that have driven tenant demand in recent years, such as positive net migration, high student numbers and people preferring to buy later in life, are continuing."

Find the best mortgage for you - Compare buy-to-let mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

New Year tips to improve children’s money skills

How many have better budgeting as their New Year’s resolution? As with many things, these skills are best learned when young, so Lemonade Money has come up with some tips to help parents make their children more financially savvy.

Money worries lead to Christmas on credit

Money worries are putting Christmas at risk for up to five million Brits, with 10% saying they regularly worry about money in the lead up to Christmas, and the same proportion feeling stressed about how much they are spending.

Would you spend more for a character property?

We all have our own ideas of what makes a dream home, and for many, character features are at the top of the list. But how much more would you be willing to pay for those kinds of additions – and could they even help you save money in the future?
 
Close