Reacting to reports that rents are to be fixed within tenancies for a two year period, Dr. John McCartney, Director of Research at Savills said;

“Looking at the proposals, there will be winners and losers. Sitting tenants who have just agreed rent reviews would benefit most as they would face no further increases for another two years. However, the longer it is since their last rent review, the shorter the period of immunity that tenants will have and the less they will benefit. But some tenants will actively lose out. Those who are starting new leases will face higher costs because landlords will simply frontload rents on day one to compensate for the fact that they won’t have any increases for another 24 months.”

From the landlord perspective McCartney continued;

“The major concern has always been that, if rent certainty it was done badly, it could stifle investment and drive up rents by choking-off supply. Thankfully, the reported measures would be unlikely to put off new investment. New landlords coming to the market are not tied into an historic rent level – they can charge the open market rate on day one.  This open market rate will simply adjust upwards as landlords price in the fact that they can’t increase the rent for two years.”