Landlords will raise rents to cover new legislation costs

Some 45% of landlords surveyed by flatsharing website SpareRoom.co.uk said they plan to raise their rents this year.

Covering the costs of new government legislation was the most common reason for raising rents, cited by 38% of those who confirmed they will be charging tenants more in 2016.

This year will see the introduction of the Right to Rent scheme, the scrapping of the formal Wear & Tear allowance and additional stamp duty costs on the purchases of buy-to-let properties.

These incoming initiatives come hot on the heels of a number of potentially costly legislative changes introduced in 2015, including mandatory smoke and carbon monoxide detectors in rental properties as well as extensive changes to the Section 21 evictions process.

The next most common reason given by those landlords looking to increase rents in the next 12 months is to mirror rising rents in their local area. 

This was followed by expensive property repairs and higher mortgage repayments.

Of the 1,000 landlords surveyed by SpareRoom, 18% said they would be raising rents bye more than 3%, while 27% said they would increase rents by less than 3%.

The slim majority of participants – 52% - said they would be keeping rents the same during 2016, while 1% said they would be lowering by less than 3% and 2% of participants said they would be lowering by more than 3%.

SpareRoom reports that 49% of landlords it spoke to raised their monthly rents in 2015.

“Buy to let looks like far more of a risk than it did at the start of the year,” comments Matt Hutchinson, director of SpareRoom.co.uk.

“The worry is that tenants will bear the brunt of these changes. And if renters end up being the ones to shoulder the burden of legislative change, something has gone very very wrong. The private rental sector is already under immense pressure,” he says.

Towards the end of 2015, landlord insurance provider HomeLet reported that over 90% of landlords it surveyed said they do not plan to increase rents in the first six months of 2016.

The same report indicated that only 34% of landlords plan to increase rents over the next 12 months.