Around 40% of landlords expect rents to keep on increasing in 2013 – and 10% of them predict rises of 5% or more.
Few tenants expect to pay less rent either – with just 1% hopeful their costs will fall next year.
The data comes from a survey by one of the UK’s leading letting agents, LSL Property Services, which runs high street brands like Your Move and Reeds Rains.
The study revealed current average rents are going up by 3.4% a month – but landlords expect that figure to increase to 4.5% next year.
The firm’s David Brown said: “Fierce demand from tenants has let many landlords raise their asking prices when letting properties, stopping inflation from eroding rental income – and this is likely to continue.
“Pension savers have been hit particularly hard by the Chancellor’s autumn statement and as rental yields improve, private rental property is attractive as a long-term investment.”
Two-thirds of landlords expect tenant demand to keep rising in the next 12 months, while 3% expect demand to drop.
The study echoes research by property portal Rightmove that forecasts rents to increase by 2% in 2013.
This a slowdown compared to the annual average rent rise of 4.5% the firm has recorded over the last three years.
The Rightmove survey found a quarter of landlords have already decided to put rents up, with a third considering a rise of around 5%.
The web site’s director Miles Shipside said: “The widening gap...
between tenant demand and rental property supply over the last few years has fuelled upwards pressure on rents. However, the majority of landlords now seem to be prepared to exercise constraint and are planning a ‘rent freeze’ for 2013.
“Tenants in rent hotspots like London and Manchester may bear the brunt of higher rises. This combination of apparent benevolence and bullish hotspots may give a less racy rent rise outlook overall, but does not mask the fact that some tenants are again in for a rent rise shock.”
Rightmove data shows that average rents have now increased by 13.64% between since September 2009 and September 2012.©LandlordZONE® – legal content applies to England and is not a definitive statement of the law, always seek professional advice. If you have questions on these issues go to the LandlordZONE® Forums