More than three-quarters of people renting privately are concerned about the impact of the cost-of-living crisis on their ability to pay their rent, according to a new research.
The survey of over 12,000 tenants and 1,000 landlords, conducted by HomeLet with Dataloft, revealed that 78% of renters feel that cost-of-living increases will have a moderate to a significant impact on their ability to pay the rent. Some one in four renters rank this as their top concern in the next year, closely followed by worries about landlords increasing rent.
HomeLet says that rent accounts for an average of 30.5% of a renter’s gross monthly income in the UK, ranging from 23% in Northern Ireland to 34% in London. But with inflation at its highest rate for 40 years, many renters are set to feel the squeeze.
For landlords also, renters’ ability to pay tops the list of their concerns for the coming year. This was above concerns about the abolition of Section 21 notices and other taxation or legislative issues.
The landlord survey found that, while 36% of landlords have no plans to increase rents in the immediate future, over 40% are likely to raise rents as they too seek to cover rising costs and respond to current market pressure.
Andy Halstead, HomeLet CEO, commented: “Many people in Britain are facing a financial crisis. We have the perfect storm, ramping inflation, interest rate increases and war in Europe that exponentially impacts utility prices. Landlords know the pressure on tenants, but many landlords must increase the rent because the cost they face is growing. Landlords and Tenants are people; both groups are equally affected, as our letting agent businesses. Add to this crisis the government interventions, which make life even more difficult for all concerned in the rental sector.
“The rental market plays a critical role in satisfying the UK’s housing needs; there simply isn’t enough housing stock. Many landlords are choosing to exit the market, which only causes further strain on stock levels and letting agent businesses.
“The government’s commitment to legislation in the market through the Renters’ Reform Bill will provide the most significant change to rental law in a generation, and I can’t see any positives. We are in for a rough ride. Our commitment to taking the risk out of lettings has never been greater; the cost of rent guarantee is low, and the legal support that comes with rent guarantee is also crucially important. HomeLet, Let Alliance, and Rent4sure are here to support the needs of letting agents and their customers.”
Sandra Jones, managing director of Dataloft, added: “Landlords and tenants are part of the same ecosystem – it’s better for both sides when the system works well. If, as this survey clearly shows, there is widespread concern amongst tenants about rising costs and the potential impact on their ability to cover their rent, then it makes sense for landlords to be part of the solution.
“This is one area where I believe the institutional rental sector (Build-to-Rent) outperforms the private rental sector. Providers understand the importance of consistently managing customer expectations. They use their scale and resources to negotiate with utility suppliers, offering greater security and cost predictability. Build-to-Rent providers invest continuously in ways to improve the renter experience. Understanding what is on the renter’s mind is key to that, and right now, it is the rising cost-of-living.
“Whilst this kind of customer service is an acknowledged piece of the Build-to-Rent operational model, there’s an opportunity for managing agents to offer a similar level of professional management that puts the relationship at the heart of the landlord/tenant interaction. With costs and concerns rising, this is a time when all renters will value a professional and engaged relationship with their landlord.”
SOURCE: Property Industry Eye | JUNE 27, 2022 | MARC DA SILVA
Estate Agents
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