Buy to let: rising rents cause problems for tenants

Rents have increased for the third consecutive quarter, according to research by Paragon, the buy to let lender.

But rising rents appear to be causing problems for many tenants. According to new research from the Money Advice Trust, the number of calls it receives about rent arrears has risen by 84pc in recent years.

A spokesman said: "Many first time buyers cannot get a mortgage so demand for rented property have risen. But with landlords pushing up rents this has left some people struggling to meet bills, particularly as this has coincided with a rise in inflation, particularly of food and fuel costs."

According to Paragon, a third of landlords increased rents across their property portfolios in the third quarter of this year – compared with just 29pc in the previous three months. Just over 10pc of landlords said their rental income had increased by between 2pc and 4pc, while 13pc of landlords increased rents by more than 4pc.

Only 4pc of the landlords surveyed for the quarterly report said they had experienced a decrease in their rental income.

However, it is professional landlords rather than small scale buy-to-letters who are pushing through the biggest increases.

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Almost four out of 10 (39pc) professional landlords said their rental income had increased during the last three months, while 75pc of smaller-scale landlords said their rental income remained the same over this period.

Nigel Terrington, chief executive of Paragon, said: "Tenant demand has been growing for a number of years, but in recent months it has accelerated considerably. As the report shows, a third of landlords are benefiting from increases in rental income without making their properties unaffordable for tenants.

"With tenant demand only looking to increase further in the coming months, landlords are likely to continue to experience increases in their rental income, especially given that 49pc of landlords said they expect demand to further increase in the next 12 months.

"It is crucial then, with increases in demand, that investment continues to be made in the private rented sector, ensuring that it remains fit for purpose and continues to provide good quality and affordable housing to millions of tenants."

by the Telegraph