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Why is the Cost of Renting on the Rise?

Richard Knowles of Element Finance, a property specialist, reported this about the rental market on LinkedIn;

“Asking rents outside London have hit a new high.

The pressure comes from record demand from tenants, and by strong price growth in the south western and northern regions in particular.

Due to the pandemic, not only have two bedroom houses overtaken studio flats as the most in demand, studio flats have fallen seven places, behind bungalows and houses as renters look for spare rooms to set up spaces to work from home.

With working from Home and outside space becoming a priority renters habits are changing.

If you are a buy to let landlord this is something to bear in mind when looking for your next project.”

Market demand and tenants’ preferences are most definitely an issue, particularly with that demand outstripping supply, but we also need to consider the financial and legal pressures placed on Landlords by the Government with the variety of legislation that has been brought to bare. Increased taxation, hardening attitudes to evictions, abolition of section 21 have all made the Landlords life much harder. As we stated in our recent post, Who Would be a Landlord?, 94% of Landlords have only one or two properties so it is highly likely that at some point they may well decide to take their property back to live in or even sell. As this is no longer straight forward it is another factor pushing rents higher. Increased risk and cost to the Landlord is hardly likely to keep rents at a low level and needs a re-think if the housing crisis is to be eased in any way.

Perhaps separating Landlords between professional and part time based on the number of properties under their control would ease the burden. The issues are:

  • Differentiating between privately owned in own name and owned by a Company.
  • Multiple Directors in a company so who has control?
  • Making complicated legislation work.

This will be an ongoing issue with no sign of a resolution, perhaps Government will yield when they see rents continually rising, potentially increasing the hardship of tenants.

If you are looking to take advantage of the stamp duty holiday and sell your property quickly then get in touch with us here at Sell My House Quickly Grantham and we will give you a fair price for a fast sale.