Forced Rental Increases Mean the Time May be Right to Sell Your Property

Forced Rental Increases Mean the Time May be Right to Sell Your Property

One of the most difficult aspects of renting out property is ensuring that your tenants are up to date with their payments.

If things go drastically wrong and arrears mount up it can often take up to six months to regain possession of your own home, if that is what you decide to do.

Some tenants, who have a very good understanding of the system, can delay matters even further.

Consequently, increasing numbers of landlords are quitting the business because they cannot deal with massive rent arrears.

This situation can only get worse because a report suggests that new rent increases will be very difficult for tenants to cope with.

This research is important because the Governments (in Westminster and Holyrood) have introduced extensive new taxes on landlords.

And the only way for many property owners, particularly those who joined the buy-to-let boom, to stay in business will be to increase rents.

In many cases, according to the report, these new tariffs will be unaffordable.

If you are a landlord who has ended up in that position through no fault of your own, then R&T Property Solutions might be able to help.

We are based in Glasgow but we buy property and land right across the whole of Scotland and in England.

We want to purchase property as part of our long-term investment strategy for the business.

We work fast and can pay cash if necessary.

Typically, we can conclude the paperwork in less than 3 – 4 weeks. But if you are in a hurry we could fast track the transaction in seven working days.

There will be no brokers or estate agency fees and a Home Report is usually not required.

We’re looking for properties in all areas, Edinburgh, Glasgow, Aberdeen, Inverness, Dumfries and all points in between.

The same applies if your portfolio includes premises south of the Border. It doesn’t matter if you have just one flat or a whole street. We want to hear from you.

And don’t worry about vacant possession. We are more than happy to take on tenanted properties.

The research into the impact on tenants of rent increases was conducted by YouGov for property classifieds site The House Shop, which helps landlords and potential tenants find each other.

It claims that further rent rises in the private rented sector could stretch the ability of tenants to pay as they are already at or near financial breaking point.

It is widely expected that rents will continue to increase throughout 2017 with a change in tax on landlord income due to be introduced set to be a catalyst for rent hikes.

Now research suggests that 16% of private renters cannot afford even a 1% increase in monthly rent, while 26% cannot afford an increase of up to 3% and nearly half cannot afford an increase of up to 5%.

The YouGov survey for The House Shop asked people to estimate the minimum percentage that their monthly mortgage or rent payments would have to increase before they became unaffordable.

Across both mortgage holders and renters, some 22% said they could not afford an increase of up to 3% in their monthly housing costs and 18 to 24 year olds were least likely to be able to absorb higher monthly increases.

“We all know that the rental market is highly competitive right now, and tenants’ budgets are already stretched to breaking point,” said Nick Marr co-founder of The House Shop.

“Therefore the prospect of any further rent rise is a real concern, and as our research shows, even a relatively minor increase in monthly rent payments could push tenants over the edge.

“The fact that 16% of renters said that they would struggle to afford even a 1% increase in monthly rent is especially worrying as this could equate to as little as £7.79 extra per month based on average UK rents.

“The results also show that 27% of renters would struggle to afford an increase of up to 3%, or a potential monthly increase of just £23.37.

“These figures are totally at odds with the various surveys and research papers showing that the majority of landlords are planning to raise rents on their tenants within the next 12 months.”

He believes that this demonstrates that there is a ticking time bomb in the Private Rental Sector.

Green Party member of the London Assembly Sian Berry, said recent research also shows that rent increases is the most common problem reported by renters in the last three years.

Meanwhile, Dan Wilson Craw, policy manager at Generation Rent, warned that landlords attempting to raise rents will have a fight on their hands.

“Rents are already taking a huge bite out of tenants’ incomes, so any attempts to raise them further will be met with resistance,” he said.

If all of the above makes grim reading for you, then get in touch with our experts. We will give you the best advice we can, whether you sell your property to us or not.