From The Guardian:
Tenants are facing steep increases in rents as landlords push prices back to levels not seen since the start of the economic slowdown, according to the LSL monthly index of buy-to-let rents.
The worst [sic] increases are in the south-east where, according to LSL, in just one month alone landlords have pushed up rents by 2.8% – far outstripping wages. London also saw a 2% rise during August, with the average charged now standing at £961 a month. Over the year, the Yorkshire and Humberside region has suffered the biggest annual rise, up by 5.4% to an average of £528.
Rising rents are forcing many tenants into arrears. LSL estimates around 507,000 in the UK are now behind with payments, up 70,000 on the month alone. It said arrears stand at 11.3% of all rent in the UK, compared to 9.7% in April. LSL is the largest residential letting agency in the UK, operating under brands such as Your Move and Reeds Rains.
As Drewster says at HPC:
Hang on a minute, something doesn't add up here. Rents have risen, but also "around 507,000 in the UK are now behind with payments, up 70,000 on the month alone". Arrears are rising much faster than rents. Therefore these rent rises are clearly unsustainable.
Friday, 17 September 2010
Rent Increase Fun
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4 comments:
I saw your comment at HPC that you never increased the rent for your existing tenants. I've lived in two properties where the rent was increased while I was in it, including this one.
When I moved into one property the landlord failed to inform me that he had already had planning permission to knock the building down and build flats. I only found out when a notice appeared on a lampost outside.
Tenancy law in Britain need reforming to take into account contemporary circumstances where increasing numbers of people are permanently excluded from owning property. Landlords and tenants need to be able to sign longer term contracts with more security. I appreciate that this means that that tenants might be required to do their own repairs but personally I have no problem with that at all. I would happily take on the responsibility for doing repairs in return for more security.
I already do my own repairs after an incident where I reported a fault with a water tap to the agency but nobody came to fix it. To be fair on the landlords, when I asked them about it they said that the agency had not passed on the message to them.
TM, there are good and bad landlords; good and bad tenants; and good and bad letting agencies.
AST's are fairly open ended, what i would like to see is some assymetry, i.e. that the tenant only has to give one month's notice but that the landlord has to give six months' notice (except in case of non-payment), that should even things out. Whether that's a question of changing the law or best left to the markets I do not know.
It is interesting to speculate whether this is an issue that could block EU integration because renting for long periods is more common on the continent. The French can sign nine year contracts and can't be told to leave during the winter I understand, and German law is "depressingly pro-tenant". If the EU eventually turns its attention to harmonising tenancy law would we be forced to go over to a continental "pro-tenant" model? I am sure that the French would refuse to change to an Anglo-Saxon model!
I don't believe that the market will sort this out without a legal framework to work in. There is nothing wrong with the AST - it works fine for students, for example - but there should be more choice of contracts for people with different needs.
TM: "there should be more choice of contracts for people with different needs"
The law could give this a nudge, but wouldn't a tenant be prepared to pay an ever slightly higher rent, the longer the mismatch between his notice period and the landlord's? If you can give one month's notice at any time, but the LL has to give twelve, then that is worth more to the tenant than two months each way, for example, so in this case, the LL would be able to charge (say) £10 more per month (or something).
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