42% Of UK PRS Landlords Plan 2014 Rent Increases
According to the latest survey by specialist house share website, Spareroom.co.uk, 42% of UK private rented sector landlords expect to increase rental prices over the next 12 months and of those some 26% are planning to increase rents by more than 3%, which is significantly higher than inflation.
In their latest Rental Index, Spareroom revealed the average cost of a double bedroom in a shared house increased by 4.5% in the final quarter of 2013, reaching a new average of £507 (GBP) per calendar month.
Room rents in London also saw a rise in prices, with an increase of 2% over the same time frame, meaning the average cost of a double room in a shared house in the nation’s capital is now at an average cost of £676 (GBP) per calendar month.
Whilst some landlords plan to increase rental prices, 58% of Spareroom’s Rental Index respondents stated that they will not be raising rents and 5% of UK PRS landlords claimed that they intend to reduce rents during 2014. Director of Spareroom.co.uk, Matt Hutchinson stated: “The good news is the majority of landlords would rather keep good, reliable tenants than make a few hundred pounds extra profit a year. Landlords hiking rents up by more than three per cent risk attracting tenants who could struggle to pay their rent on time or, even worse, risk void periods with no tenants and no rental income at all. Tenants should not just accept rent increases and should ask their landlord or their appointed agents to carry out improvements on the property in return. Tenants should also check the small print in their tenancy agreements to see if a mid-contract rent rise is allowed.
The results of Spareroom’s rental index correspond with the findings of a study carried out by the LSL property group who reckon that 58% of rental property owners expect tenant demand to remain strong during 2014, a sentiment echoed by a number of other surveys and studies by property professionals, including mortgage lenders, Halifax and Nationwide, who all reached similar conclusions.
Tenant demand will be as strong as ever during 2014 and landlords who wish to cash in on this demand should take action now in order to attract tenants and avoid costly void periods.
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