How the UK Rental Market Is Adapting to Rising Costs of Living

How the UK Rental Market Is Adapting to Rising Costs of Living

The UK rental market has been a hot topic lately, with changes to rent rules, increased demand, and landlords selling up. However, despite the negative press, it's important to understand the reasons behind the rising rents.

While tenants understandably feel concerned about the cost-of-living crisis impacting their monthly rent, it's essential to recognize that landlords are not solely to blame. Owning investment property is a business, and for many landlords, it's their primary source of income.

In this brief two-minute read, we'll explore the reasons why rents are increasing and how landlords are coping with the current situation.

Mortgage rates
As interest rates rise, so do buy-to-let mortgages. This is the same for both residential and investment properties. If the mortgage payment is higher, landlords may need to raise the rent to cover their costs. Owning a rental property is not a get-rich-quick scheme, and landlords need to make sure that their rental income covers the mortgage payment and other expenses.

Changes to tax rules
The UK tax laws have undergone significant changes in recent years that have impacted landlords. These changes have led to many landlords selling their rental properties, and others have been forced to increase their rent to cover their financial obligations. While it's not easy to navigate these changes, many landlords are doing their best to comply with the regulations.

Increased costs of repairs and maintenance
Landlords are responsible for the upkeep of their properties, which includes paying for repairs and maintenance. The cost of labour and materials has increased, along with service charges and ground rents. Additionally, rental properties must meet higher levels of energy efficiency, requiring major works that could affect the rent charged.

Despite these challenges, Wright Residential are here to help landlords and tenants in finding the right rental property. Our lettings team is ready to assist you in navigating the current rental market and finding a property that meets your needs.