The Labour Party’s proposal to introduce an annual indexation of rents will leave more tenants out of pocket and only exacerbate high rents in the UK, as it will encourage a culture of regular rental increases, according to the National Landlords Association (NLA).
The NLA has backed up its assertion with its latest research findings, which reveals that many landlords are choosing not to raise their rents despite local market rates increasing over the past year.
45% of landlords say that rents have risen in their local area over the past 12 months, yet just a third have raised rents during that period. Fewer still – 28% – say they plan to raise rents over the coming months.
Furthermore, the findings show that the majority of landlords raise rents between tenancies rather than on existing tenants. Of those landlords that increased their rents in the past year, six in ten (60%) did so when letting to new tenants, rather than on existing tenancies, and fewer than three in ten (29%) said they raise their rents regularly or as part of a scheduled annual increase.
Carolyn Uphill, chairman of the NLA, said: “Our findings show that the majority of landlords don’t plan to raise rents and don’t simply just increase rents as a matter of course. Our primary concern is that a system of rent indexations – as proposed by Labour – will only serve to encourage a culture of regular rental increases by providing the basis to legitimately escalate rents on a regular and sustainable basis.
“Labour has targeted the UK’s 9 million or so renters as they recognise that they will play a major part in deciding outcome of next year’s general election. However, it’s painfully evident that they’ve given no thought to the potential impact of their proposals and tenants should be aware that, sadly, this particular aspect will only leave them worse off.”