Rents in the UK rose by an average of just 0.8% in February compared to the same month of 2016, well below the general rate of inflation at 1.8%.
Despite the decline, research by HomeLet reveals over half of the 3,726 landlords surveyed expect to raise rents in the face of mounting cost pressures. However, almost a third of those or 29% admit they plan to defer this hike to 2018.
Dilemma for landlords
Factors such as April’s impending tax changes threaten to raise costs for many landlords, on top of last year’s Stamp Duty surcharge. But they are also acutely conscious of the need to ensure rents are affordable for tenants.
HomeLet’s chief executive officer, Martin Totty said: “In recent months, we have seen landlords treading very carefully with rental price rises, amid concerns about tenants’ ability to pay. With more than one in five landlords (21%) blaming an increase in their tax liability for raising rents, it remains to be seen if this can sustain.
“Landlords will hope the Chancellor does not make it harder for them to continue supporting their tenants in this way, with further changes to the tax system or legislation, as he prepares to unveil his Budget on the 8th March.”
Totty added that many landlords will be anxious. “HomeLet’s landlords survey shows that, for almost a third of landlords (31%), the prospect of further changes in legislation is now their biggest concern.”