Can anyone in the know advise me please? Is rent going to keep increasing so significantly?

[PanickedRenter]

We’ve lived in our current property for 6 years now, our rent is low and we have a lovely landlady. Very small yearly rent increases. Sadly, space is very tight and we have made the decision to start looking for a bigger property. When we first moved to the area, 6 years ago, a three bedroom house was around £1300 - £1500. Now for a similar property it’s almost a £1000 more a month 🤯. Are these increases expected to continue? It’s very hard to get a clear sense online. Do landlords consider a lower offer? Or is it so competitive at the moment that I’d be laughed out the door? I just don’t want to commit to paying over £2000 a month if rent is going to increase by £200 each year.

Any advice or insight from anyone a bit more in the know would be greatly appreciated. Thanks.

Maybe, depends where you are. Historically there was always a ceiling for rents as the market decided. However, there's now the increased pressure from regulation and changes in legislation and it's causing a good number of landlords to exit the market. The gap is supposed to be filled by build-to-rent and corporate landlords with higher standards...so the problem is scarcity and that leads to higher prices.

It's so risky letting now and there's not that much return on investment, especially if you look after your tenants, like it sounds your landlord does.

Thanks for this. I’ve seen so many properties that are both up for rent and sale at the moment. We’re trying to decide whether it’s better to secure a rental before any changes take effect, or after.

Have a look at Rob's videos on YouTube, the channel is the Property Hub.

They're investors but they also rent and he's good at explaining the current trends and things. It might help you understand the principles.

If you're looking at paying £1000 a month more in rent, would you not be better off staying where you are and saving £1000 a month towards a deposit so you can buy?

We’ve been saving for what feels a lifetime. On paper, it’s the most sensible idea to save that £1000 but it simply isn’t practical anymore. My kids really need their own rooms, probably have done for the past year, so we have made the decision to move.

That’s great. I’ll check him out, thanks.

Is social housing an option @PanickedRenter ? You could go on the housing list, and if you are overcrowded you may get lucky. Depends on your income of course, and if you earn over a certain amount - in my county it's a family income of £50K a year - you don't qualify for social housing. Also, if you have £30K or more in savings or assets you don't.

You can still go on the list and stay on it though. Then if your circumstances change and you are on less income/have less income, and you have several years waiting time, (and are over-crowded) you could get housed quite quickly in social housing...

I suspect it largely depends on where you are.

i’m south east. I rented about three years ago and in the 24 hours the property was up on open rent they had twenty applications.

stuff through estate agents you had to pass income checks just to go on the waiting list to apply.

my DS rents in London and that is worse apparently.

absolutely no chance of a landlord taking a lower offer anywhere in the south east. In fact prospective tenants are more likely to offer over the stated rent in an attempt to get the property.

It's absolutely insane isn't it? We are not quite in the same situation as abroad but we had to move last year and are paying over double our previous rent. The house is a little bit bigger at least but not by much.

Have you looked into what is the smallest possible deposit you could have and still buy? Shared ownership/FTB type schemes? If you are going to be paying £1000 more monthly, it's possible that sticking that amount into a LISA or similar rather than another landlord's pocket might be worth it if it gets you anywhere near the amount for a deposit.

I wonder if your landlady might be willing to look into doing something like an extension, especially if you were happy to pay towards some of the costs/accept a rent increase? It is a bit of an outside of the box solution but if she's nice, it couldn't hurt to ask whether she'd consider it?

Thank you for this suggestion, it’s good to know. We don’t qualify for this, but it’s always good to keep in mind x

Oh wow! So very competitive then. I don’t think I’ll be very successful asking to pay less.

One of the upcoming changes is they aren't allowed to accept more than the advertised rent... so maybe landlords will be advertising higher in the view they may take lower.

We could definitely do shared ownership but there’s absolutely none in our area. If the kids were younger, we would consider moving, but they have their whole life’s here and we love the area. I’m always keeping an eye out, but on the rare occasion a shared ownership property has come up, it gains lots of interest and is snapped up.

Oh that would be amazing, sadly theres not even space for an extension. We really have persevered for the last couple of years but we all feel so squashed here now. I’m kind of regretting not moving sooner but our landlady and the cost made staying appealing.

Very interesting! I guess it may be worth asking then.

I rent out a flat in zone 2 in London. The rent has gone up 40% in six years, which is surprising as I didn’t increase the rent for my first tenant in the first three years at all. But new tenants mean a rent increase. It goes in a day or two it’s a competitive market. It’s also a very nice flat.
So I’m not surprised you are finding rents have gone up by so much. And not sure if it’s just me but with an easygoing tenant I may not increase the rent each year - my second tenant was a pita so her rent went up every year, and I’ve now decided not to renew her lease at all. I have another tenant who is great and I haven’t increased her rent in six years (really should now though)!
Good luck with your search.

It Is partially question of luck. Some landlords prefere immediate profit and increase the rent as often as they can.
Some prefer keeping easy tenants and don't increase for the top of the market prices so often.

Thank you for your insight @mondaytosunday @ThreeSixtyTwo . I have been looking on OpenRent aswell, as it’s directly with the landlord. I know my landlady will give us a good reference too, fingers crossed this may help our position. I’m aware that money may trump seemingly good tenants though.