Despite confidence in the rental market remaining fairly steady, a significant proportion of student landlords have chosen to increase the cost of rent for their tenants.
According to research conducted by Accommodation for Students, over a quarter of student landlords have increased rents for all their properties in 2014, while over a third did so for some of their properties.
In the vast majority of cases, however, these increases were not very dramatic. Of those who increased rents for all of their properties, over 94% did so by between 1-10% across their portfolio. No respondent reported having increased their rents by more than 25%.
With house prices continuing to rise, it’s perhaps unsurprising to learn that the most common incidence of rental increases occur in London and the South East. In London, 100% of respondents increased rents for their tenants in 2014, with 12.5% reporting that they increased rents by 21-25%.
There is also a relationship between the size of a property portfolio and increases in rent. For instance, respondents with larger portfolios were more likely to have increased their rents for 2014 than those with less than 10 properties.
Furthermore, letting success from the previous year also appears to have an impact on whether rents are increased. Respondents who failed to let their full portfolio in 2013 were 50% less likely to increase their rents in 2014, with three quarters reporting making no increase at all. Of those who did increase their rents, all reported an increase of less than 10%.
Accommodation for Students concludes that increases in rent were mainly well-judged. In the vast majority of cases, increases in rent could be put down to changes in market conditions or to keep pace with inflation. It is likely, therefore, that this trend will continue into the next letting year, with landlords making small, incremental increases in rent in order to remain competitive.