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Tenants in the UK are concerned about rent rises resulting from the recent decision by the Chancellor of the Exchequer to scrap mortgage tax relief for private sector residential landlords. New research shows that some 38% of tenants are feeling uncertain as to how the cuts will affect them and over 50% are calling for greater rent control measures to be introduced. Indeed 35% of tenants say that they would move to a different property in the event of a rent increase, according to the research from comparison website Makeitcheaper. A breakdown of the survey findings show that just 20% of tenants would stay in their current housing, one in 10 said they would be forced to seek council housing and 17% would be more motivated to buy their own property. These results show that landlords may run a high risk of losing tenants by increasing rent, around 80%, as many would be simply unable to afford a price hike. There are certain rules around rent price increases that landlords must adhere to. For example, landlords cannot raise prices in a fixed term tenancy prior to the end date, without the tenant's agreement. But, even with these precedents in place, there's a good chance that tensions between landlord and tenant could grow in the event of price rises. However, the latest landlord research by buy to let lender Paragon Mortgages has revealed that 75% of landlords are confident their tenants will not get into more difficulty in the next 12 months as rental arrears will remain stable. The lender’s PRS Trends Survey results for the second quarter showed a 4% increase in those landlords who felt tenant rental arrears would remain stable, the third successive improvement. The proportion of landlords reporting an expected increase remained low and unchanged from the previous quarter at 8% whilst those landlords expecting a decline in arrears was 6%. The survey also revealed that 17% of landlords are planning to purchase additional rental properties over the summer quarter. There was little movement in the most popular property types landlords are looking to buy, with terraced properties and semi-detached houses topping the list at 38%, followed by 35% looking to buy apartments. ‘Landlords continue to experience strong tenant demand and are keen to add to their portfolios. The positive signals being picked up elsewhere around the economy also seem to have flowed through to the PRS with landlords experiencing low arrears and low, stable voids,’ said John Heron, director of Paragon Mortgages. Continue reading →
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