A nice dramatic headline – but’s happening – rental Costs on the up yet again
So I’ve been calling this all year – Rental Prices are going up.
There’s such a shortage of property for rent, and so many tenants all looking for the same thing, rents have had to go up.
Not only that, but we have a ‘perfect storm’ where landlords are concerned – and they’re being squeezed out of the market place.
The perfect storm consists of these 3 main factors
- removal of interest rate relief
- Increase in Stamp Duty costs
- Removal of Wear and Tear allowance
In addition to that, as recently announced in the budget, letting agent costs are now to be banned – and so what happens is that the agents don’t just say ‘oh go on then, we’ll do without’ – they have to recoup the cost from somewhere. And obviously it will be from the landlord who now needs to recoup that cost from the tenant.
All of this means that rents are going up.
If you needed more proof, a quick look in Leeds City Centre for the cheapest property to rent was £550.
That includes studios, 1 bed and 2 beds. Now there was a time just say 2 or 3 years ago where the cheapest would have been around the £395 mark. But all of those got snapped up.
In fact, I currently have a tenant who is paying £395 on a studio apartment in Leeds, and he’s been there 3 years (I tend not to increase rents to tenants who are already in a property).
So now he’s moving out, this rent will easily get £495 (That’s a 25% increase). And I reckon at a push we could get £525 or even £550 (There’s another property in the same block as mine)
Let me give you another example – a one bed apartment that was rented at £650 has just gone for £695 to the first person who viewed it. The existing tenant did the viewing, and we’ll organise Tenancy Agreement, cleaners and keys all remotely from Spain (Because we’re organised and systemised like that).
So – still don’t think rents are going up ?
Now is a great time to get in to Buy To Let – I know there is a lot of uncertainty with all the tax changes, but you know, whenever there is massive change going on in a market place someone stands to make a lot of money.
The question is who is it going to be.
You, the tenant, or the agent ?