Buy to let rents up but income rises too
AFS Team·11 July 2014·4 min read
The research was carried out by Homelet and they found that tenants signing agreements in May 2014 are paying around 7.5% more in rent than tenants at the same time last year. However, the firm's Rental Index also found that the most tenants have seen wages increase by 7.2% in nine of the 12 regions covered by the survey.
Martin Totty is the chief executive of Homelet owner Barbon Insurance and he says: “The return for rental property investors looks secure as there isn't a shortage of tenants able to pay rising rents.”
Wages rise to help fuel rent increases
He described the rental market as being 'robust' and added that the incomes news was good for landlords and tenants alike. With tenants able to pay, Mr Totty explained, demand for rental homes would grow as investors become attracted to the sector's returns. The index also reveals that with house prices rising by 10% over the past year, the sector is seeing more people turn to renting private homes since they cannot afford to buy.
Buy to let investment looks increasingly attractive
Mr Totty added: “The UK's buy to let sector plays an important role - it is important that rents for tenants remain affordable but which also offer attractive returns for landlords.” The average buy to let rent now being paid in the UK is £687 outside Greater London, and £846 for tenants in the capital though the figures revealed that if the rent increases being seen in London are stripped out, then rents rose by just 2.5% in the year to May. The three regions which have bucked the trend of rising wages include Greater London, Northern Ireland and Yorkshire and Humber. The average UK income is now rising by 1.7% the year, according to the Office for National statistics.
'Retaliatory eviction' warning to MP
Further to our story last week about the MP Sarah Teather's bid to bring in legislation that would make it illegal for landlords to evict a tenant in retaliation for making a complaint, the founder of Landlord Action has issued a warning. Paul Shampolina says that the law would need to be carefully worded because, he says, tenants can use it as a loophole against eviction being brought by responsible and reputable landlords. He said: “Rogue landlords should not be evicting a tenant who has asked for repairs but we have seen cases where a tenant has caused damage purposely to show a bigger problem with repairs to benefit their court case.”