5 days ago
Rents to surge £900 to pay for Labour reforms
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Labour's rent reforms will add almost £900 a year to the average tenancy, a report has warned.
Nearly half of Britain's buy-to-let landlords (44pc) plan to increase rents in response to the controversial Renters' Rights Bill, according to research by housing lender Landbay.
The landmark legislation, due to kick in this autumn, will limit landlords to just one rent increase per year capped at the 'market rate' – the price that would be achieved if the property was newly advertised to let.
Landbay said property owners were planning to increase rent by an average of 6pc, which would add £74 to the average monthly rent, or £888 a year.
The survey also found that the majority of landlords (89pc) intended to raise rents in the next 12 months. More than a third (40pc) planned to increase rents by 3pc or more over the next 12 months, while over one in 10 (11pc) said they did not intend to put up rents at all.
The Renters' Rights Bill will introduce new protections and rights for the 11 million private tenants in England by reforming the current system of renting. An end to fixed-term tenancies, longer notice periods, and restrictions on rent increases will give tenants more rights and landlords less control over how they manage their property and buy-to-let business.
The bill is currently being scrutinised in the House of Lords. The Government aims for the reforms to receive Royal Assent by summer 2025, with implementation expected between October and December this year.
The National Residential Landlords Association (NRLA) argued that the bill could force landlords out of the sector and push up rents if it is passed in its current form.
Chris Norris, of the NRLA, said the 6pc rent increase figure was consistent with the NRLA's estimates that the Renters' Rights Bill would trigger rent rises of 3pc to 4pc above inflation.
He added: '[The bill] is likely to affect tenants directly in many more ways than landlords.
'You have the prospect of tenancies becoming more risky, harder to end – and you have to wait longer to claw back arrears.
'Landlords will be pricing in that risk when setting rents.'
A recent survey by Pegasus Insight showed that 37pc of landlords planned to sell a property in the next 12 months while just 6pc said they intended to buy.
Rents in England rose by 1pc in May to £1,226, the highest level since October 2024, according to letting agent software firm Goodlord's rental index.
William Reeve, Goodlord's chief executive, said: 'Although the pace of year-on-year increases is starting to slow… ongoing supply issues coupled with landlord jitters ahead of the Renters' Rights Bill means that rents remain on track to rise for the foreseeable future.'
The Government was approached for comment.
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