Half of landlords hold rents steady amid tenant cost pressures

Half of landlords hold rents steady amid tenant cost pressures

A recent survey by the TDS Charitable Foundation reveals that 50% of private landlords in England have not increased rents over the past year, prioritising tenant retention and acknowledging ongoing cost-of-living challenges.

The latest research from the TDS Charitable Foundation, surveying over 2,000 private landlords in England, shows a significant rise in the proportion of landlords choosing not to increase rents. Half of respondents reported keeping rents unchanged in the last 12 months, up from 39% the previous year. This trend emerges despite the introduction of the Renters’ Rights Act, which has altered the regulatory environment for landlords and tenants.

Nearly half of landlords who did not raise rents cited tenant retention as their primary motivation, with 44% specifically concerned about the financial pressures tenants face amid the cost-of-living crisis. Landlords with smaller portfolios, no property debt, or those who have never used letting agents were less likely to increase rents. Conversely, landlords with larger portfolios, higher incomes, or those managing Houses in Multiple Occupation (HMOs) were more inclined to raise rents, typically to offset rising running and maintenance costs.

Survey findings on rent adjustments and arrears management

The survey also found that 48% of landlords increased rents at least once in the past year, often citing increased operational expenses as the driver. Larger landlords and those using letting agents were more likely to implement rent rises. Meanwhile, rent arrears remain a concern, with just over a quarter (26%) of landlords reporting at least one tenant in arrears, a slight decrease from 29% last year.

Landlords are actively engaging with tenants to manage arrears, with 42% discussing repayment options directly and 39% providing information on tenant rights and support services. Additionally, 21% of landlords have agreed repayment plans, and 17% have offered rent-free or reduced-rent periods to ease tenant financial strain. This approach reflects a more collaborative stance in managing arrears, balancing landlord financial viability with tenant support.

Context of rent setting in a changing regulatory and economic environment

The decision by many landlords to hold rents steady comes amid ongoing economic challenges for tenants, including inflationary pressures and rising household costs. The Renters’ Rights Act, which has introduced new tenant protections and altered eviction processes, may also influence landlord behaviour, encouraging retention over turnover to avoid legal complexities and void periods.

For landlords, especially those with smaller portfolios or without borrowing, the choice to maintain rents may reflect a strategic decision to reduce tenant turnover costs and maintain occupancy. Larger landlords, often with more complex portfolios and higher overheads, face different pressures, making rent increases more necessary to cover expenses.

This dynamic highlights the varied impact of economic and regulatory factors across the landlord population. The balance between tenant affordability and landlord sustainability remains delicate, with many landlords adopting flexible approaches to rent setting and arrears management.

Practical implications for landlords and letting agents

For landlords managing smaller portfolios or without borrowing, maintaining current rent levels may be a prudent approach to tenant retention and reducing void risks. Letting agents should advise clients on the benefits of stable rents in a market where tenant affordability is constrained, while also helping landlords understand when and how rent increases might be justified to cover rising costs.

Landlords with larger portfolios or those managing HMOs need to carefully assess their cost structures and tenant mix. Rent increases may be necessary but should be balanced against potential impacts on tenant retention and arrears risk. Effective communication with tenants about rent changes and arrears options is essential to maintain good landlord-tenant relationships and reduce disputes.

Letting agents play a key role in supporting landlords through these decisions, providing market data, compliance advice, and tenant engagement strategies. The evolving regulatory environment, including the Renters’ Rights Act, requires agents to stay informed and ensure landlords meet their obligations while managing their portfolios sustainably.

Uncertainties and considerations for future rent policies

While the current trend shows many landlords holding rents steady, future economic conditions and regulatory changes could alter this balance. Inflationary pressures, energy costs, and property maintenance expenses may push more landlords to increase rents. Conversely, further tenant protections or support measures could encourage continued restraint.

Landlords and agents should monitor government guidance and market conditions closely. The impact of the Renters’ Rights Act on eviction processes and tenancy renewals remains an area to watch, as it may affect landlord willingness to increase rents or accept new tenants at higher rates.

Understanding tenant financial pressures and maintaining open communication will be critical to managing rent levels and arrears effectively. Landlords should also consider the long-term sustainability of their rental income strategies in light of these evolving factors.

What landlords should consider now

• Review current rent levels in the context of tenant affordability and local market conditions.
• Assess portfolio size, borrowing status, and cost pressures to determine rent adjustment capacity.
• Engage proactively with tenants on rent and arrears discussions to maintain good relationships.
• Stay updated on regulatory changes, especially the implications of the Renters’ Rights Act.
• Consider working with letting agents who provide tailored advice on rent setting and compliance.

Supporting landlords with compliance and management tools

Membership of The Landlord Association (TLA) offers access to practical compliance resources and guidance tailored to the evolving rental sector. TLA’s new property management and compliance platform, ORBIT, currently in BETA testing, aims to assist landlords and letting agents in organising rental properties, managing documentation, and recording key actions such as rent reviews and tenant communications.

ORBIT is designed to help landlords keep track of rent changes, arrears management, and compliance with tenancy regulations, including those introduced by the Renters’ Rights Act. Members can explore TLA’s compliance resources and use ORBIT’s developing features to maintain evidence of rent decisions and tenant engagement, supporting transparent and informed property management.

Explore TLA membership and ORBIT BETA access to enhance your portfolio management and compliance capabilities in this changing rental environment.

Looking ahead, landlords will need to balance financial pressures with tenant welfare carefully. Maintaining flexibility and staying informed on regulatory developments will be essential to managing rental income sustainably and responsibly.

Sources: Letting Agent Today