Landlords have had a lot to deal with in recent times. The many regulatory and tax changes imposed on the market have forced landlords to react and respond quickly, in trying circumstances. It is understandable that many landlords have resorted to increasing rental fees to manage rising costs and tax losses, but to the public, this just seems as though the landlord is increasing their profit. This isn’t the case, but it does create a problem for landlords. There is a need for landlords to deal with tax losses without increasing rents, and we are here to review the market and provide you with some tips.
In a report issued by ARLA Propertymark, it was found that 23% of tenants experienced an increase in their rent for March of 2018. This was listed as the largest increase since September of 2017, when there was an increase of 2017.
Tenants are also under increasing budgetary pressure
In the Private Rented Sector Report created by the company, it was stated that these increases are likely down to landlords recouping tax losses. As stated, this is an understandable reaction, but it is a short-term reaction. Yes, landlords are struggling with rising costs and greater budgetary pressure but the same can be said for tenants. There are fears that tenants are reaching the ceiling of what they can pay, and landlords may not be able to increase rents much further without increasing the risk of void property.
There were some positive aspects to consider in the ARLA Propertymark report. It was pointed out that there was an increase in the number of prospective tenants. This was seen in the average number of prospective tenants registered with a branch stood at 66 for March of 2018, which was an increase on the February of 2018 figures, of 61. An increase of five prospective tenants per branch may not sound like a massive step forward but it is movement in the right direction and when you consider this figure across the whole country, it does suggest that there is a lot of new people looking for rental accommodation.
Landlords should look to offer additional services
So, with rising demand for rental property, there is still an incentive for landlords to operate, but they need to make sure that they generate as much income as they can. As opposed to increasing rental fees, some options that Horsham landlords should consider include:
- Offering additional services such as dry-cleaning or parcel collection
- Offering additional utilities such as TV or broadband on top of the standard rental fee
- Rent out any available storage space
- Rent out any available parking space
These aren’t fantastic tips that will help a landlord to retire soon, but they are ways of generating additional income during a challenging period.
If you are a landlord and you would like guidance on how to best manage your operations, please get in touch with Taylor Robinson. We are local specialists and we look forward to assisting you any way that we can.