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Landlords Passing extra costs onto Tenants?

A recent study has found 40% of landlords in the UK intend to increase the rent they charge to their tenants in 2011. 55% of landlord intent to charge the same rent with only 4% willing to reduce the rent they currently receive.

1 in 10 landlords planning to increase their rent, plan on increasing it by eight per cent of the current value. This would increase rent charged for the UK’s average 3 bedroom property from £1,254 to £1,354 an increase of £100 per month or £1,200 per annum.

According to RICS (Royal Institution of Chartered Surveyors) the increase in rental prices is a direct result of landlords experiencing a higher cost to operate their properties. Landlords therefore pass on these costs to the tenants to maintain operating profits.

We however would argue against this theory. The Bank of England rate remains reduced helping landlords significantly discount their mortgage borrowing costs and allowing the landlord to profit further by the sustained and increasing rents.

Landlords are able to ask higher rents for their properties as the number of tenants competing for each property remains high.