When the Chancellor announced yet another wave of measures set to hit landlords in the pocket, most people said it was only a matter of time before rents became more expensive.
In his latest budget, George Osborne announced a three per cent Stamp Duty hike on buy-to-let landlords. From next year, tax relief will also be curbed on mortgage interest.
Most analysts were expecting that to lead to rent increases as landlords tried to ensure that their investment was still a sound one. And, new research has proved them right.
The North East, thankfully for tenants, has experienced a lower level of rent hikes than elsewhere in the country, with a rise of just 1.6 per cent from last April to this one, bringing average costs up to £532 in the region. The North East remains the cheapest place to rent in the country.
Elsewhere, rents have seen larger percentage increases. Unsurprisingly, rents in London were up by 7.7 per cent, bringing the monthly cost up to £1,543. The only region to see a decrease was the North West where there was an annual variation of -1%, bringing rental prices to £659.
There could, however, be some good news on the horizon for renters. According to new research, there has been an 11.5 per cent increase in new rental properties being listed in April. With more rental property on the market, demand is more likely to be met, which could lead to a stabilisation of prices.
Of course, it entirely depends on location, location, location. A quick search of property portals reveals everything from a two-bedroom terraced house in Ferryhill, County Durham, for £125 per month to a corporate let penthouse apartment in Newcastle for £6,000 per month, complete with pool table and a weekly clean.
The Royal Institution of Chartered Surveyors is predicting short-term uncertainty until the EU referendum, which is leading to lull in property sales. But, the organisation is also suggesting that further rent price increases are likely.
So, if youre a landlord, should you be putting up your rental prices? First of all, its worth looking at the current market, even if you think you know it inside out. Rental prices do change locally and you may find while youve had your property tenanted, there has been a switch up or down in your area.
The cost of rent is definitely one of the biggest factors when it comes to securing a tenant. So its vital to make sure your potential tenants feel they would be a paying a fair price. The average amount of time it takes to secure a new tenant is 22 days, which is almost a months rent lost. If you price yourself out of the market, your property is likely to sit empty for longer.
But its also worth looking at other factors to ensure that you attract, and retain tenants. If you have reliable tenants, is it really worth increasing the price only to have them move out?
Being flexible on the terms of your tenancy, whether a family or individual would like to be able to wallpaper a wall in the living room, or would like to be able to get a pet, could help everyone to stay happy.
Its also vital that the property is kept in a good condition for occupants and that they can reach you in the event of any problems.
Look at the picture as a whole. Take into account what your mortgage repayments are, whether you are making a profit or whether youre happy simply to cover costs as a long-term investment, along with the local market and the likelihood of attracting and keeping your tenants. Only then will you be able to decide if your rental price is right.