The proportion of renters facing rent hikes to pay for their landlord’s higher mortgage premiums has tripled over the past eight months, it has been claimed.
Generation Rent polled some 1,000 of its supporters to ask if their landlord had passed on their higher mortgage interest payments and 12% said they had, up from 4% in November.
During this period the Bank of England’s base rate has increased from 3% to 5%, with another rise due today.
“A cost of renting crisis is forcing tenants to bear the worst of the economic turmoil right now,” says Ben Twomey, Chief Executive of Generation Rent (pictured).
“While many mortgage holders have yet to see their monthly payments increase, most private renters have already faced a rent hike this past year.
“So far only a minority of landlords have been affected so badly by rising rates that they are passing them on to tenants.
“But the rising cost of rent is a much wider problem caused by the failure to build enough homes where people want to live, and the ability of landlords to raise rents regardless of what their tenant can afford.”
Mortgage rates
But Twomey says rising mortgage interest rates aren’t the biggest driver of rent rises, with rising local rents being a factor for 17% of those polled, along with landlords citing the ‘cost of living’ going up and their need for greater income.
Generation Rent also says the poll suggests 60% of private renters were asked to pay more rent over the past 12 months with some 20% being asked to pay more than £100 extra a month with most accepting the extra payments and 15-20% negotiating the increase down.
Twomey says these figures underline the need for the Government’s Renters (Reform) Bill to be expedited through parliament when MPs return to work in September.
“With many landlords struggling to cover interest rate rises, tenants need protection from unaffordable rent hikes and where landlords need to sell, the government should introduce measures to encourage them to sell with sitting tenants,” he says.
“To make renting more affordable, the government also needs to relink Local Housing Allowance with market rents, and do more to build more homes in the places people want to live.”
