Lots of people are saying that rents are ‘high’ or at their ‘highest’ and the other night on Question Time I heard Vince Cable saying they were unaffordable, and many MPs repeat this, some even claiming they are ‘extortionate’.
The reality is it is very difficult to find any evidence to back up what seems to have become ‘standard’ phrases to say about rents when asked. Sadly, not one MP I have approached and asked for their evidence has responded.
Government stats from the ONS show rental inflation is lower over the last 10 years than the actual rise in the cost of living.
And we know landlords who rent to existing tenants rarely actually put their rents up until the tenant leaves – even after many years! One landlord I spoke to hadn’t increased rent for 13 years and another hadn’t increased the rent since the 1990s. Although extremes, many landlords I meet didn’t put them up during the credit crunch, but have started to over the last year or so.
The reason being, contrary to popular opinion, many landlords who have great tenants prefer to keep rents the same, for two reasons I think. Firstly their biggest fear is the tenant might leave and secondly, which isn’t ideal for either, they seem to hope if they don’t increase the rent the tenant won’t ask for any repairs or updates to be made. One landlord and tenant that had this ‘unwritten’ agreement meant the tenant was paying around 66% of market rent, which was great for them, but they were doing so partly because the landlord hadn’t put any central heating in the property!
One of the problems we have when reporting both property prices and rents is that they are usually only measured this year versus last or month by month. This means we don’t measure today’s rents or prices versus previous highs and lows which can distort the ‘reality’ of what is actually happening.
For example, rents in the East Midlands, according to the Belvoir Lettings Index are up year on year, but only after it’s taken since 2008/9 to recover from the 20% falls seen in rents in the areas such as Nottingham.
For more on what’s the latest is in the rental market, Rental summary december 2012t.