The problem with the media bombardment at how expensive everything is and how an economic apocalypse is coming is that it gives businesses and service providers a chance to put up their prices too.
You may find that your local barber adds an extra couple of quid to the cost of a haircut – using the fair excuse that their rates and bills have gone up. The same too for your local fish and chip takeaway, the pub, the inner-city car park and so on.
For property landlords, and especially those operating on a buy-to-let basis, the increase in interest rates will force many of them to up their rental prices – that should, in theory, be in line with the rise imposed by the Bank of England.
But, of course, life doesn’t work that way, and many landlords are taking advantage of the cost of living crisis – which could force some to sell their homes and rent an alternative until lending becomes more affordable – by upping their monthly rent demands by staggering sums.
The Guardian has reported on one example of a property firm increasing their rental prices by a whopping 14% per month – in London, as one example, that could be an rise of more than £1,000 per year.
The problem is exacerbated by the scale of the energy crisis, and this winter it’s not impossible that some renters will be paying out 75% of their monthly income in rent and bills – an incredibly dire situation that this country finds itself in.
According to the Office of National Statistics, the average monthly rent charged has increased by 3% on the same period last year.
Perhaps surprisingly, London only experienced a 1.7% rise, with the East Midlands and the North-West bearing the brunt of the leap at 4.3% and 3.8% respectively. At a more localised level, it’s Manchester that has seen the biggest rise at 23.4%, followed by Chatham in the south (21.4%) and Liverpool (19.4%).
According to this ONS data, that’s the steepest increase in rental rates since they began collecting the numbers – which, played out against the backdrop of rising costs in other areas – is a disaster waiting to happen.
The problem could actually be worse too, with the likes of RightMove and Zoopla reporting rental price increases much higher than the ONS – the former claims rent is 11.8% higher now (as of June) than it was at the same time in 2021.
Unfortunately, the situation isn’t likely to get any better any time soon. Mortgage lenders will be forced to turn away more and more potential buyers, and if unemployment rises then getting a mortgage at all will be a challenge – forcing singletons, couples and families into the rental market.
And, to add a particularly bitter cherry on the cake, it has been reported that the number of rental properties available is actually shrinking – there was a reduction of 49% in March 2022 compared to 2019 figures. As we know, as demand increases for something in scarce supply, you can bet your bottom dollar that price will too.
Your Rights as a Renter
So let’s imagine a scenario where you get a message from your landlord or letting agency and they say that your monthly rent is going up. What can you do?
First of all, make sure you give your tenancy agreement or contract a good read, including the small print. This will outline what a landlord can and can’t do – typically, they can increase your rent but must give you fair and lengthy warning, so you can assess whether or not you want to continue living in the property. This is usually one month for those who pay their rent on a monthly basis, and six months for those who are charged annually.
You can agree to the rent rise or choose to walk away at the end of your tenancy, for which you will pay the agreed rate until you move out. Only then can the landlord raise their price for the next occupier.
There is no way that a landlord or letting agency can keep your deposit if you decide to walk away – unless they find damages or items needing repair. In which case, all works completed should be itemised, invoiced and then deducted from your deposit….rather than the whole sum being taken away from you without explanation.
Remember, if you are unsure about a rent increase or want to challenge your landlord’s actions, you can contact the Citizens Advice Bureau.