One in three landlords raise rents but majority hold off for reliable tenants
A third of landlords have increased rents although two thirds say they are willing to ease their demands to keep hold of reliable tenants, research shows.
According to research from Arla Propertymark, 31% of landlords surveyed increased rents to tenants in September.
While the figure was a noticeable drop from the 40% reported in August, it remained in line with figures earlier this summer.
The survey also found demand from prospective tenants fell marginally in September, with the number of house-hunters registered per branch dropping to 63 on average, compared to 64 in August.
Year-on-year, this was down 20% from the 79 prospective tenants registered per letting agent branch in September 2017.
The supply of properties letting agents managed also dipped slightly to 194 per member branch in September, from 197 in August.
Postpone rent rises
Meanwhile, research from Leeds Building Society indicated 61% of landlords were willing to postpone rent rises or offer properties below market value to help secure reliable renters.
Of the 690 landlords surveyed, 66% of those renting at below market rate were prepared to accept a reduction of up to £100 a month on market value, with 16% willing to sacrifice between £100 and £200 a month and 6% discounting rent by over £200 per month.
Brexit, economic uncertainty and an increased supply of rental properties were highlighted by landlords as reasons which could influence tenant demand in the future and make good quality tenants even more valuable.
Another study published this summer found 18% of property owners were renting more than three-quarters of their properties below market value.
Landlords being pushed out
Leeds Building Society director of product and distribution Jaedon Green said landlords were well aware of the impact Brexit and ongoing economic uncertainty could have on tenant demand.
“This is positive news for tenants,” he said.
“The negotiating position for reliable tenants is strengthening as landlords are actively taking steps to maintain the security of regular payments from dependable tenants, even if that means reducing their monthly incomings slightly.
He added that the commercial rationale for landlords to invest in the quality of their rental property has never been stronger.
“Quality properties typically result in higher tenant satisfaction which results in fewer voids and improved rental yields over the longer term,” he said.
Arla Propertymark chief executive David Cox noted that while the number of landlords increasing rents dropped in September, the figure was still high.
“Increasing costs and continued regulatory change is pushing buy-to-let (BTL) investors out of the market and deterring new ones from entering,” he said.
“An average of four landlords took their properties off the market per branch in September, up from three this time last year – and as supply falls, competition among tenants increases, which is driving up rent costs.
“With the Autumn Budget approaching, we hope the government recognises the importance of increasing supply for tenants and uses it as an opportunity to make the market more attractive for BTL investors,” he added.