2015 rent increases to be flat or rise slightly

Due to a slowing economy and rising increase rates, roughly 50% of landlords will not be increase rental rates on tenants in their private sector homes. This is a piece of good news, as many families can’t afford any additional housing expenses at this time, especially since they are faced with flat wage increases.

However, about 40% of landlords do plan on passing along some form of an increase to their tenants, and it may be as much as 3 per cent. So the news varies, and a big factor is where someone lives. Even this increase is slightly lower than what it has been over the last few years, but even so, it will be difficult for many people to handle. As a comparison, during 2014, many UK based landlords were increasing rates from about 4% to up to 8% or even higher.

The economy has improved throughout 2014, but wages have not been going up that much. So even though the jobless rate is way down, over one half of renters still can’t afford any increase, and in fact they would need to move if it were to go up by a mere £40 per month. The expensive housing is causing over 90 per cent of tenants to struggle. They still say the government is not doing enough to create affordable housing across the UK, and these increases will make it even more challenging for many people.

In the defence of landlords, they are saying with an expected increase in interest rates in 2015, they need to pass these additional costs on to their tenants as their mortgage payments will be going up. So they are in effect blaming this on the Bank of England.

Many property owners are trying to limit any increase though, especially to solid tenants that have paid their rent on time in the past. They would rather hang on to someone they know rather than have a tenant move out and then have a vacant home.

Organisations such as Shelter will always recommend that families review their tenancy agreement. So contracts will state what a landlord can or can’t do. Some renters have a fixed-term tenancy, and this will normally limit or even prevent an increase. Other agreements are written in such a way that landlords can pass on increases at almost any time. So review it closely.

If there are questions on the agreement in place, then someone can stop by either their local council housing department or Citizens Advice Bureau. Both of these organisations will have staff on hand that can answer questions and help people review their contract. The advice offered when it comes to reviewing a tenancy agreement is provided at no cost to the client.