Should the lack of rental properties due to lockdown trigger a rent increase?
There is no doubt about it. The turnover of rental properties in our region has tumbled over the last 12 months, and for obvious reasons.
With less people leaving a rental property and the continued exodus from city locations, London in particular, that means competition for rental property is high. So in market terms it’s great news for landlords and anyone with a GCSE in Economics would tell you a scarcity in supply should trigger an increase in prices.
Ok you guessed it, no piece is complete without a plot twist. Rather predictably that twist is also COVID.
Eviction rules and rules on rent arrears are stacked in favour of the occupant, the government, quite rightly does not want to see people lose their homes as a result of their actions. Covid related closures of industries has seen the average income of a tenant tumble in the last 12 months, by roughly 5% in the last 6 months, closer to 10% for London based tenants. So affordability is stretched.
There are also a lot of articles referencing rent arrears. But there were rent arrears before 2020-21 and there will be after as well. Personally I have not seen wild increases in arrears, mainly due to the Furlough scheme and faster availability of benefits to support people.
So there are two questions to answer for two types of landlord. Those with tenants in situ and those looking for tenants. My answer is similar for both; be considerate, understand your tenant’s position, their employment status, family situation and health.
People with problems always have a lot of bills to pay and in my experience will always pay the people they like, respect and value first either in business or their personal lives.
What I’m saying is, everyone’s in a similar boat and being the nice landlord might just bring you more income later down the line.