Landlords expect rent rises to slow over the next twelve months to below the target rate of inflation, according to a sentiment survey of more than 1,100 conducted by letting agent network Your Move and Reeds Rains.
On average, landlords estimate that rents will increase by 1.8% in the next twelve months. This is lower than the Bank of England’s 2% target for inflation, and would also represent a slowdown on the current pace of annual rent growth.
The majority of landlords polled said they did not intend to raise their rents in the next year as only 43% confirmed that they expect to raise rents in the coming twelve months.
Of those who intend to increase rents, 57% of landlords cite covering the cost of inflation as their main motivation. Paying for maintenance work is the second most significant reason, listed by 31% of landlords.
David Newnes, director of Your Move and Reeds Rains, commented: “Demand for rented accommodation is climbing, and there’s little sign of this stopping. While Help to Buy and higher LTV lending are enabling first-time buyer activity, strong house price growth this year has lifted homeownership a few steps out of reach for many, and the private rented sector remains the safety net supporting those still saving for a deposit. This is in addition to the thousands of people who rely on renting to offer them flexibility and freedom in their working lives.”
“This demand is also powering more supply. Secure house prices and spirited tenant demand are encouraging budding buy-to-let investors and existing landlords to add to the number of available homes to let. The benefits of more investment will be felt in tenants back pockets at the end of the month, as the strain of rent rises eases further,” he added.