Rents are set to rise an average of 2% in 2013, tempered by majority of landlords planning a ‘rent freeze’.
Some 61% of existing landlords are planning a ‘rent freeze’ for 2013, the clearest indicator yet that landlords will opt for a lighter foot on the ‘rent rise accelerator’ next year.
Just one in four (25%) of existing landlords intend to put rents up in 2013, and of those only around a third (35%) plan a raise of more than 5% - the result is likely to see the annual rate of growth ease to circa 2%.
Landlords becoming increasingly mindful of tenants’ ability to meet rising rental demands, heightening risk of arrears and voids. So far more than a fifth (22%) of current tenants pays 50% or more of their take-home pay on rent as ‘affordability ceiling’ comes into view.
Miles Shipside, director and housing market analyst at Rightmove, said: “The widening gap between tenant demand and rental property supply over the last few years has fuelled upwards pressure on rents.
“However, the majority of landlords now seem to be prepared to exercise constraint and are planning a ‘rent freeze’ for 2013. Lettings agents still report consistently high demand but more are warning landlords of the risks of squeezing tenants’ finances too hard.
“However, some tenants in rental hotspots like London and Manchester may bear the brunt of higher rises. This combination of apparent benevolence and bullish hotspots may give a less racy rent rise outlook overall, but does not mask the fact that some tenants are again in for a rent rise shock.”
David Sansome, Managing Director at Sansome & George said: “Every situation needs to be looked at individually in order for a landlord to get the best return on their investment. This should include factors such as the longevity of the tenancy, the avoidance of void periods and the quality of tenant in terms of rental payments and property maintenance.”
