Over one in four landlords (27%) are expected to raise the rent that they charge tenants by more than 3% in 2015, which is triple the latest rate of inflation in the UK.1
Additionally, 13% of landlords are planning to increase their rents in 2015, but by less than 3%.1
Buy-to-let investors will probably see an increase in their costs, as market pricing rising in the Bank Rate in the second half of 2015, which would raise mortgage costs.
These figures, from flat and house sharing website SpareRoom.co.uk will knock the confidence of generation rent even more, as they already face huge rental bills, especially in London.
The capital has seen the average room rent rise by 4% annually, up to £704 per month, from £676 last year.1
13% of Landlords Plan to Increase Rents in 2015
The average rent for a double room in shared housing has grown by 8% in the last year, to £546 a month, from £505.1
If rents increase by another 8% next year, tenants would see an extra £44 a month in costs. Over half of the 3,000 tenants studied in another survey said that they would need to find different, cheaper housing if their rent rises by up to £40 per month.1
However, finding new accommodation can be a struggle in itself. Recent research by estate agent Sequence has found that demand for rental properties around the UK has risen by 18% year-on-year, as seven potential tenants compete for every new property on the market.1
This is an even greater problem for those living in London, where some renters have to lose their living room to gain another bedroom and therefore bring the cost of rent down. The survey claimed that 17% of all sharers in London live in the same room, with 5% even sharing a bed to save money.1
Director of SpareRoom.co.uk, Matt Hutchinson, says: “While the majority of landlords do all they can to hold on to good, reliable tenants, those facing increased mortgage repayments when interest rates rise may have no choice than to cover the extra cost by passing it on to their tenants.
“That could have serious implications for a rental market already reaching crisis point, and there’s no contingency plan.”1
|What do landlords plan to do with rents in 2015?1
|Raise by over 3%
|Raise by less than 3%
|Keep the same
|Lower by less than 3%
|Lower by over 3%