Low-income households being “priced out of rental market”
The Royal Institution of Chartered Surveyors (RICS) has suggested that rents are not in-line with household incomes, which could be problematic for landlords looking for new tenants. According to RICS, predictions that rents are likely to rise by over 20 per cent in the next five years means many people are likely to be priced out of suitable properties.
Those on low incomes and housing benefits have seen access to private rented properties fall, according to a third of the respondents to the institution's latest survey. Added to this is the fact that housing prices are expected to increase by 18 per cent in the next five years, which means that more people will require access to rental properties.
Unfortunately, the survey also showed that the number of properties available to rent is falling across the country, being outstripped by demand. Tenant demand is much higher than the number of properties being advertised for the 38th consecutive month.
This can mean that some landlords are tempted to increase prices as they face high demand, which can price out those on lower incomes.
Sean Tompkins, chief executive of RICS, said: “The housing market is falling increasingly out of step with the majority of household incomes. In the current climate, it can be hard enough for young professionals to make ends meet. But for those on benefits, the pressures may be insurmountable.”
However, over half (52 per cent) of those surveyed said they would consider renting properties to homeless households or those receiving housing benefits if the government provided financial guarantees for deposits and rent, as well as ongoing support. This suggests that increased government help could see more tenants finding homes and fewer landlords with properties that are empty for extended periods of time.
Landlords should ensure that they do not increase their rents to such a level that it prices out potential tenants. This will help to make sure that they have a larger pool of prospective renters to choose from and that they are not left with empty properties for extended periods of time between tenants.
Offering properties at affordable prices is also a good way to ensure you attract those looking for longer leases, which can reduce costs and hassle over time.