Rent Increases Expected by Majority of Tenants
In a recent poll of tenants across the country over 60% of those responding said they expected their rents to continue to rise over the next year.
Whilst the majority of tenants still only look at renting as a short term solution there does appear to be huge long-term demand for rental properties across the country. The demand has been so much that it’s estimated at having grown over 100% in the past couple of years the actual pool of rental properties being made available has actually fallen. This has obviously led the considerable increase in rents we have seen, especially over the last 12 months.
One of the reasons for the reduction in supply has been many tenants having to continue to rent as they cannot afford the large deposits now required by many mortgage companies as they have tightened their application rules. Also, there has been a lack of Buy to let Mortgage products on the market which has reduced investors entry into the market, again reducing the number of rental properties.
The problem is that unless the supply of rental properties increases at some stage rent rises will have to slow down as they will become unaffordable for many tenants and the end result will be more and more rent arrears issues.
Many tenants are already refusing to pay increased rents as some “opportunist” landlords seek to regularly increase their rents.
Investors are hoping that the BTL products become more affordable and tenants hope that more and more rental properties come onto the market that will start to slow, if not drive down rents again in some parts of the country and a recent Housing Market Forecast showed the gap between supply and demand is shrinking, predicting a slowdown in increasing rental values