Average UK rent prices continue to break all records on file, yet the demand for quality rental properties across the country remains at an all-time high. As a result, many now believe that the potential profitability of BTL investments could lead to a major spike in irresponsible letting practices as many new landlords enter the market.
A poll conducted by Get-Ground found that more than 80% of established landlords believe current market conditions could trigger an increase in irresponsible BTL activities. 75% of those polled believe that tenants are finding themselves with little choice but to be less demanding and discerning, potentially playing into the hands of unscrupulous landlords.
From excessive monthly rent payments to higher utility bills to monthly rent hikes imposed without warning or justification, tenants are willing to accept wholly unacceptable treatment simply to gain and/or retain tenancies.
“With recent history as our guide, it’s easy to imagine how the PRS could be brought into disrepute by bad actors: disproportionately high rents, unexpected bill increases, unfairly terminated tenancies, and so on,” said Faizullah Khan, CEO at Get-Ground.
“Landlords and tenants alike need the right protections and safeguards to ensure none of this poor behaviour is able to happen, particularly as high mortgage and energy costs continue to put even more pressure on landlords to find means to stay solvent.”
A perfect storm
Khan’s sentiments were shared by Ben Beadle, CEO at the NRLA, who warned that the escalating living-cost crisis combined with skyrocketing monthly rents could create the ‘perfect storm’ for those affected.
“Get-Ground’s snap poll data highlights a perfect storm that’s coming, combining the increased cost of living with rising rents,” he said.
“That rents continue to rise is due to the impact of a lack of supply and record demand in the PRS—this is very much a problem of the government’s own making.”
Recent data published by the Office for National Statistics does not make reassuring reading for anyone already struggling to make ends meet. Average monthly rent prices are up across the entire country and are predicted to continue heading skyward over the months to come.
- Private rental prices paid by tenants in the UK rose by 4.0% in the 12 months to November 2022, up from 3.8% in the 12 months to October 2022.
- Annual private rental prices increased by 3.9% in England, 3.1% in Wales, and 4.4% in Scotland in the 12 months to November 2022.
- The East Midlands saw the highest annual percentage change in private rental prices (5.1%), while London and the North East saw the lowest (3.5%).
While commenting on the findings, the ONS highlighted how some letting agents are actually registering fewer tenants, as they simply do not have the available inventory to support them.
“The Association of Residential Letting Agents (ARLA) reported in their Housing Insight Report that they are now seeing a slight decrease in the number of prospective tenants registered per branch because of the ongoing lack of supply. ARLA also reported an increase in rent prices was seen across the UK,” read the ONS report.
“The Royal Institution of Chartered Surveyors (RICS’) UK Residential Market Survey reported tenant demand remained strong across the lettings market, driving rents higher.”
“These supply and demand pressures can take time to feed through to the Index of Private Housing Rental Prices (IPHRP). This is because the IPHRP reflects price changes for all private rental properties, rather than only newly advertised rental properties.”