Posts with tag: rents and inflation

Private Sector Rents Drop in Line with Inflation

Published On: January 13, 2015 at 2:44 pm

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Private Sector Rents Drop in Line with Inflation

Private Sector Rents Drop in Line with Inflation

Recently, there has been an increase in calls for rent controls in the private rental sector (PRS).

However, the Residential Landlords Association (RLA) have analysed the Government’s English Housing Survey, and found that in real terms, private sector rents are dropping.

Average private sector rents rose by £10, from £153 to £163 per week, an increase of 6.5%.1

At the same time, average social sector rents increased by £18, from £71 to £89 a week, a rise of 25.4%.1

During this period, the Retail Prices Index (RPI) was measured at 16.2%, and the Consumer Prices Index (CPI) was 16.7%.1

Between 2011-12 and 2012-13, average weekly rents in the private sector dropped by 0.6%, from £164 to £163.1

In the same timeframe, social sector rents saw a rise of 7.2%, from £83 to £89 per week.1

The Labour Government in February 2010 published a consultation on Investment in Private Rented Housing. It highlighted the risks of rent controls: “A key factor behind the decline in the PRS was the introduction of rent controls during the First World War, and these became more extensive over time. Artificially low rents reduced investment in the sector, contributing to lower maintenance standards in the stock that remained.”1

1 http://www.landlordtoday.co.uk/news_features/Private-sector-rents-fall-in-real-terms

 

Private Tenants Should be Allowed to Rent for Life

Published On: January 2, 2015 at 9:55 am

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Private rental sector tenants should be able to stay in their homes for as long as they want to and rent rises should be linked to inflation, says think tank Civitas.

These new rights would allow tenants to stay in rental properties and rents staying in line with inflation would be guaranteed, Civitas argued.

It believes that a new regulatory scheme is necessary in the private rental sector to avoid landlords abusing the shortage of housing at tenants and taxpayers expense.

It is predicted that the private rental sector will make up over one third of the UK’s housing stock by 2032. Currently, two fifths (40%) of private tenants’ income is taken up by rent.1

Private Tenants Should be Allowed to Rent for Life

Private Tenants Should be Allowed to Rent for Life

Increasing costs in the market are transitioning into a higher housing benefit bill, revealed the Future of Private Renting report.

The amount of private tenants relying on housing benefit has more than doubled in the last ten years, from 772,000 in 2003-04, to 1.7m in 2013-14.1

This number is expected to hit 1.85m in 2018-19. According to the report, the amount of housing benefit rent subsidies claimed in the sector has more than doubled over the past decade, from £3.9 billion in 2003-04 to £9.5 billion in 2013-14. It is set to reach £10 billion in 2018-19.1

Although this is crucial for low-income households having to rent privately, these figures are creating a vicious cycle by supporting the rent inflation they are supposed to alleviate, the report states.

In places with many claimants, landlords have the opportunity to set rents at unnaturally high levels in line with the local housing allowance.

The report’s author, Daniel Bentley, says that it should be compulsory in the private sector to offer indefinite tenancies “as the norm”. Once a rent price has been settled, index-linked ceilings on increases would offer security to tenants.1

1http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11321360/Buy-to-let-tenants-should-be-able-to-rent-for-life.html