Another month has gone by, and with it the ever-changing private rented sector has been as fast-paced as always.
In September's newsletter, we cover the energy price cap, Scotland's rent freezes, and some of the data we've seen over August when it comes to rental prices across the UK.
Energy Price Cap
On 26th August, the speculation came to an end when it was announced that energy bills would be capped at £3549 per annum for the average household, which is much higher than the predicted £2800 & sees a yearly increase of over £1000 for many households.
If you're a landlord who has bills included with their property, now is a good time to check in with your energy supplier to see if you are on a fixed rate, and if that will be changing, as well as ask what your price per kw will be for gas & electricity moving forward so you can work where you stand, how this will affect your profit margins & the running of your portfolio, and how best to move forward.
3 in 4 tenants worried about their ability to pay rent amid cost of living
Many tenants are responsible for their own bills, and with the cost of food and other expenses increasing almost as rapidly as energy prices, it has been found that 3 in 4 tenants are worried about how the cost of living will impact their ability to pay their rent. Some research suggests that 3in 4 landlords who are satisfied they have a good tenant aren't increasing their rent, or even lowering it slightly, to help their tenants so they can keep them long term.
Scotland Freezes Rental Prices
Last Tuesday, 6th September, it was announced that rental prices in Scotland would be frozen until at least 31st March next year, with many outlets discussing the potential for a two-year freeze.
This has angered many landlords who rely on their properties for their income, and without the ability to increase prices in line with inflation, which many landlords do once per year to keep up with the market rate, they are worried they will see their profits diminish and therefore may feel their budgets tighten when it comes to their own cost of living.
Many feel that the Scottish Government has alienated landlords over the past few years, with eviction bans also causing many landlords problems, and that political reasons are at the root of freezing rental prices rather than aiding tenants to meet their living costs.
We've heard from several landlord bodies & associations that an even greater number of landlords with properties in Scotland are now looking to leave the market & sell up, as they feel the restrictions there are very unfair and leave them & their property at risk of anti-social behaviour and a lack of profitability. If more landlords were to leave the PRS in Scotland, it would add further problems to the low supply of suitable accommodation in the nation, leaving more tenants without an adequate home & pushing rental prices up to unsustainable levels if freezes were to be taken off at some point in the future.
If you're affected by any of the issues we covered here, please contact your local letting agent by booking in a call below.