A survey by buy-to-let (BTL) lender Landbay revealed landlords’ plans to protect their businesses before the bill – which will increase protections for renters and make it tougher for landlords to force evictions and increase rents – is made law.
Of those who are raising rents specifically because of the Renters’ Rights Bill (44%), landlords with portfolios of between four and 10 properties are most likely to increase rents. This is closely followed by those with between 16 and 30 properties.
Properties in the South East are most likely to be impacted, followed by those in the North West.
Rents will increase by 6% on average, which will add £74 per month to the average monthly rental figure.
Under the Renters’ Rights Bill, landlords will be limited to just one rent increase per year to the market rate – the price that would be achieved if the property was newly advertised to let.
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Tenants, however, have the opportunity to challenge this at a first-tier tribunal if they believe it exceeds the market rate.
‘Unintended consequence’ of Renters’ Rights Bill
Rob Stanton, sales and distribution director of Landbay, said: “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.
“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.”
The vast majority (89%) of landlords intend to raise rents in the next 12 months. While more than a third plan to increase rents by 3-10% over the next 12 months, just over one in 10 landlords (11%) said they do not plan to put up rents at all.
Stanton said reforms needed to be balanced with support and safeguards for landlords to make sure that the rental market continued 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 buy-to-let lender is to ensure our product range is competitive and delivers exactly what landlords need – whether that’s for purchases or refinancing,” he added.
Average monthly private rents in the UK rose 7.4% year-on-year to £1,335 in April, a slightly lower growth rate than the 7.7% recorded in March, Government figures showed.
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Landlords plan £74 monthly rent increase ahead of Renters’ Rights Bill
