UK Buy-To-Let Landlords expect Rent prices to Rise in 2013

Just over a third of landlord insurance holders are expecting to increase their rent prices in 2013, a study from LSL Property Services has revealed. It is believed that the Autumn Statement released last week has had a direct impact on the amount of people becoming landlords, as well as the costs of rent. David Brown, commercial director at LSL Property Services stated that “Pension savers have been hit particularly hard by the Autumn Statement, and as rental incomes improve, buy-to-let looks increasingly attractive as an alternative long-term investment.”

The survey polled just over one thousand landlords, and revealed that 39 per cent are planning to raise their rent by an average of 4.6 per cent. Furthermore, ten per cent of those polled are expecting to raise rental prices over five per cent, and only one per cent are planning on actually decreasing their prices. According to the LSL, the average rate of rental increase is currently only 3.4 per cent, meaning that next year the rental market will become even more profitable.

Brown has said that he believes that the fact landlords are planning on increasing their rent prices next year is down to more fierce competition from tenants wanting properties. The poll shows that almost half of the landlords surveyed have seen an increase in rental demand in the past six months, with sixty five per cent believing that this increase will continue within the next twelve months. Brown also notes that many landlords may be increasing their rent in order to prevent inflation eating into their income.

Brown stated that “With lending to first time buyers without substantial deposits historically subdued and the number of UK households increasing, landlords expect demand for rental accommodation to swell further.” This means it may be the perfect time for landlords to invest in more properties, with over have of those landlords polled (52 per cent) saying they are now enticed to make further investments due to such high tenant demand.

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