Nearly half of landlords plan to raise rents by £888 this year

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Nearly half of buy-to-let landlords in Britain plan to increase the rent they charge because of the Renters’ Rights Bill, research shows.

The bill, brought in by Labour and set to come into force this year, means landlords will only be able to increase rents on their properties once per year.

This increase would also be capped at the market rate – the price they would achieve if the property had been newly advertised for rent.

But figures from housing lender Landbay found 44% of buy-to-let landlords will increase rents in response to the bill, by an average of 6%.

This is well above the current level of inflation of 3.6%.

This increase would add £74 to the average monthly rent, costing tenants an extra £888 per year.

Plus, tenants can challenge rent increases at tribunal if they think they exceed market rate.

Their research also found the vast majority of landlords (89%) plan to raise rents in the next year, with about 40% planning to increase rents by 3% or more.

The figures come at a dire time for renters, as there are 1.7million tenants who are only one paycheque away from being homeless, Shelter says.

Rob Stanton, sales and distribution director of Landbay, said: ‘This sharp rise in rents in the short term shows the unintended consequence of this new regulation, as landlords look to act now and pre-emptively raise rents in fear of future cost implications or difficulties, and to protect their investments.

‘By forcing the hand of landlords in this way, there is a real risk of worsening the cost of living crisis that so many private renters are currently facing.

‘Any good and reasonable landlord will agree with protecting the rights of tenants, but they also believe that the rights of the property owner should be protected too.

‘There’s no doubt we need to balance reform with support and safeguards for landlords to make sure that the rental market continues to play the important role it does in the UK’s housing mix.

‘While we may not be able to influence government policy or regulation, our role as a BTL lender is to ensure our product range is competitive and delivers exactly what landlords need – whether that’s for purchases or refinancing.’

What is the Renters’ Rights Bill?

The Renters’ Rights Bill is bringing in new protections and rights for the 11million people in England who privately rent.

This will give tenants more rights – but landlords see the reforms as giving them less control over their properties.

Critically the bill will also abolish Section 21 ‘no fault’ evictions – but the National Residential Landlords Association has warned the courts will not be prepared to cope with the increase in demand.

Landbay research found that 75% of landlords are concerned about the removal of Section 21 evictions and their ability to remove ‘problem tenants’.

The move raised fears tenants could be kicked out of their homes before the Section 21 ban comes into effect after ‘veiled threats’ made by landlords.

The bill is currently being looked at by the House of Lords, and if it is given Royal Assent by the summer as planned it should come into force by the end of 2025.

Other changes included in the Renters’ Rights Bill include:

• Landlords can no longer ask tenants to pay more than one month plus a deposit equating to six weeks’ worth of rent
• Ending fixed term tenancies
• Extending notice periods
• Allowing tenants to request a pet
• Restricting rent increases

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