With the sun finally showing, and the days feeling brighter, it seems like there’s also some good news on the horizon for landlords - it's about time!
Recent research from the Royal Institute of Chartered Surveyors has revealed that rental rates in the UK are expected to increase by around 20% over the next five years.
Surprisingly, the rise is not expected to be as fast in the capital, with the research expecting to see only a 15% hike in the capital – good news for renters who are already stretched to meet high rental rates in one of the world’s priciest cities.
One of the reasons we could be seeing such a significant jump is the ever-increasing level of demand being placed on the private rental sector. With property prices expected to increase 18% in the same timeframe, the shortage of available properties is increasing, with tenant demand outweighing the number of new properties being brought to market. This trend has been building for three years, and as more and more people turn away from buying, and look towards rental option as a long-term housing solution, it’s not a trend that the experts see changing.
Whilst the rise may be welcomed by landlords who are now facing heftier bills, taxes and more stringent legislation to abide by, it is bad news for tenants, with many experts predicting that the hike in prices will see tenants reliant on housing benefits forced out of the private rented sector. A third of respondents to the RICS research admitted that they believe that people on lower incomes are being pushed out of the market, with 29% blaming caps on housing benefits.
It’s not all bad news for tenants though. Over 50% of landlords said that they would be prepared to rent their property to households in receipt of housing benefit, or homeless people, if help was offered through central government to provide financial guarantees for deposits and rent.
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