Research by FCC Paragon reveals that rent prices have climbed by as much as 9.9% in the past year alone.
And even if the proposed Renters’ Rights Bill is passed into law it’s unlikely to hamper landlords’ ability to benefit from a thriving rental market.
The proposed Renters’ Rights Bill includes clauses that are designed to protect tenants against landlords who use unfair rent price increases as a backdoor route to eviction, stating that landlords cannot implement mid-tenancy rent increases that go beyond the accepted market rate.
While some landlords have expressed concern that any such clauses will negatively impact their ability to turn a profit from the private rental market, FCC Paragon’s new analysis of rent prices in Great Britain show that the cost of rent has risen rapidly over the past year, growth that the RRB will do little hamper.
RENT INCREASES
The analysis shows that the average rent in Great Britain currently stands at £1,338 per month having increased by 8.1%, or £100, in the past year (Jan 24 – Feb 25, latest available). This is equivalent to an average monthly increase of £8.33.
London has seen the biggest increase with rents climbing by 9.9% since January 2024 leaving the current average at £2,235 per month. This marks an annual cash increase of £201, equivalent to an average monthly increase of £17.
The North West has seen an annual increase of 9.3%, followed by the North East (8.7%), Wales (8.6%), the East Midlands (8.4%), East of England (8.1%), West Midlands (7.5%), South East (7.1%), South West (5.9%), Scotland (5.7%), and Yorkshire & Humber (4.9%)
TENANTS CAN APPEAL
The Renters’ Rights Bill states that tenants can appeal any above-market rent increases that they suspect are being implemented as a ‘backdoor means of eviction’. However, landlords will still be able to increase their rents in-line with local market rates – a price that would reasonably be achieved if the property was being newly advertised on the market
It’s important to note that these RRB proposals only apply to the Private Rented Sector, and the rules surrounding rent increases for social rented homes will remain as they currently are.
UNFAIR PRACTICES
Bekki Leaves, Managing Director of FCC Paragon, says: “The Renters’ Rights Bill will not hamper the profitability of being a buy to let landlord. Nor will it slow the rising price of rent in Britain.
“With regards to rent prices, the key focus of the Renters’ Rights Bill appears to be stopping landlords from forcing evictions by increasing rent to an unacceptable level that is out of step with fair market rates.
“But by no means does it mean that landlords cannot increase rent for existing tenants to match increases in that fair market value.
“For example, landlords in London can now fairly insist on increasing their rents by up to 9.9% for tenants who moved in at the start of 2024. As such, they are going to be no worse off with the RRB in place than they would be without it.
“The government is determined to avoid implementing any kind of rent control on the British market, so this is an attempt to thwart the unfair practices of a few landlords and ensure people can afford a good home without having to stem the profit potential of enterprising landlords.”
