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Rents reach affordability limit

  • 22/09/2015
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Rents reach affordability limit
There is growing evidence that buy-to-let tenants cannot afford more rent rises, with landlords now limiting their increases.

Research by the Association of Residential Letting Agents (ARLA) found that in August only 33% of agencies reported increasing rents.

Rents have risen rapidly in recent years, with poor housing supply allowing landlords to increase the amount they charge each month.

However, some tenants are still battling with rising costs – particularly in the South West of England. Here, some 42% of agents reported rents were increasing, four percentage points higher than last month.

By comparison, the North West of England saw just 12% of agencies reporting increasing rents.

Tenants in Wales also faced increasing rents, with 36% of agencies home to increasing rents compared to just 11% in July.

Across the country supply has continued to fall, with the average letting agent holding 178 properties per branch. This figure is well down on the 189 each branch held in July.

David Cox, managing director at ARLA, said that tenants were getting some respite from rising rents.

“Our findings this month are good news for the majority of tenants, as less are experiencing rent hikes. However, a third of agents are still seeing landlords pushing rents up, which reflects the sorry state of affairs in the market,” he said.

“With increasing pressure on the dwindling supply of housing, and the number of house-hunters growing, rent increases are unfortunately very common – as one in three tenants are experiencing. Despite the fact they have fallen this month, it’s likely they will go back up again over the next few months.”

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