'No Sign' Of Rising Rents Abating

AFS Team·27 March 2019·3 min read
'No Sign' Of Rising Rents Abating

'No Sign' Of Rising Rents Abating

Private rents rose by 1.1% in the year to February across the UK, the Office for National Statistics says.

The data reveals that, on a monthly basis, rents grew by 1%.

In England and Wales, rents rose by 1.1%, while in Scotland they grew by 0.7%. In Northern Ireland, rents rose by 2%.

However, the ONS data highlights that London's market is subdued, with private rents rising by just 0.2% over the year, that's up from January's figure of 0.1%.

When London's rents are removed, rental growth in the UK was 1.5% year-on-year.

Rent rises show no sign of abating

The chief executive of property tech firm Goodlord, Tom Mundy, said that while landlords will enjoy the fact that rent rises show no sign of abating, wage stagnation means these rises will hit tenants.

He said: "Despite having record levels of employment, more young people are set to become lifelong renters so every month that rents rise is another month where the generation will feel the impact on their standard of living and their bank balance.

"I think now, to justify these increases, landlords and the wider market have a responsibility for ensuring that renting is a positive and enjoyable experience for everyone involved."

The executive director at the Intermediaries Mortgage Lenders' Association (IMLA), Kate Davies, said that after landlords have filed their tax returns they will be increasingly aware of growing financial challenges.

She explained: "While the need for increasing their income has not crystallised yet, the pressure for increasing rents is likely to mount."

Landlords worry over repossession rights

Meanwhile, one legal case has highlighted worries from one landlord organisation over repossession rights.

They say that a landlord's right for repossession in legitimate circumstances should be protected if the government is looking for the sector to back the potential of longer tenancies.

The Residential Landlords' Association (RLA) points to a recent court case which saw a landlord's attempt for regaining their property being deemed invalid over a gas safety certificate dispute.

In that case, the tenant appealed successfully on the grounds that before moving in they were not given a gas safety certificate.

However, the landlord made this available after the tenancy started.

The RLA's policy director, David Smith, said: "Protecting landlord rights to repossess properties legitimately is key for providing confidence in the sector and the need for offering longer tenancies."