Tenants spend around 39% of their monthly wages on rent accordingly to recent research and more than a fifth spend more than half of their monthly earning.
With one in 4 landlords now intending to put tenants monthly rent up in 2013 with a third of landlords raising it by more than 5%. Around 60% of landlords will keep rents at existing levels too.
Miles Shipside, Director & Housing Market Analyst at Rightmove said: “The widening gap between tenant demand and rental property supply over the last few years has fuelled upwards pressure on rents. However, the majority of landlords now seem to be prepared to exercise constraint. Letting agents still report consistently high demand but more are warning landlords of the risks of squeezing tenants’ finances too hard. However, some tenants in rental hotspots like London and Manchester may bear the brunt of higher rises. This combination of apparent benevolence and bullish hotspots may give a less racy rent rise outlook overall, but does not mask the fact that some tenants are again in for a rent rise shock.”
Landlords now need to be considering whether it is better to hold off on increasing rents or chance a rise and run the risk of ending up with less desirable occupant. The report also suggests that 59% of existing tenants would like to buy but cannot afford to do so, the highest level Rightmove has recorded since it started its quarterly rental surveys in 2010.