According to some, the main reason rents are rising across the board is because we landlords are a greedy bunch who are cashing in on the current high demand for rented properties. But is that a fair assertion, or are there other factors at play?
Well speaking as a landlord, I can categorically state that I do not make a point of increasing my rental charges so I can afford a nice foreign holiday! Sadly, the real reason I am forced to increase my rents periodically is to cover the rising costs I face on a daily basis.
Why are rents rising?
Rental payments very often cover the cost of a mortgage on the property and many lenders insist that rental payments are higher than the cost of the monthly mortgage payment, so if your repayment is £900 per month, you could be expected to pay £1,017 per month, or 130% of the mortgage payment.
If you use a letting or a managing agent, you can expect to be paying any number of rip-off fees and mysterious charges that rise inexplicably during the course of your business relationship, which means that your unfortunate tenants are going to have to foot the bill. Service charges on leasehold properties also have to be factored in, and these can also end up being extremely costly.
So quite aside from the fact that we landlords do actually prefer to make a profit from our rental property business, the rising costs associated with letting properties is the main reason rentals are continuing to rise!