PRS rents rising below inflation
Published by Max Salsbury for 24dash.com in Housing and also in Finance
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The Residential Landlords Association has warned that rent controls could damage tenants’ budgets after statistics revealed that rents in the private sector are increasing by less than inflation.
The latest figures from the Office for National Statistics show that rents rose by an average of 1.4% in the 12 months to March 2014, compared to a consumer prices index rate of 1.7% and a retail prices index rate of 2.5% over the same period.
The RLA, which represents over 20,000 PRS landlords in England and Wales, says the figures show that pegging rents to inflation would leave many tenants worse off.
Chris Town, RLA vice-chair, said: “Rents in the private sector are continuing to rise by less than inflation. The sector offers a good and flexible option for many tenants in the face of much steeper house price rises.
"It’s important that people who talk about controlling rents through linking them to inflation realise that this could in fact hit many tenants who could face higher rents as a result.
“The real problem is with supply. The government should be making it easier for private landlords to provide more homes. An expanding private rented sector has a key role in tacking the nation’s housing crisis.”
According to the RLA, PRS rents have risen by 9.5% across England over the past nine years and in London by 12.5%. This compares with an RPI increase of 33.8% and a CPI increase of 13.3% over the same period. By contrast, council rents rose by 42.5% and housing association rents by 43.8% over the eight years between 2005 and 2013.