THE cost of renting a house in Northern Ireland is rising more dramatically than anywhere else in the UK, figures show.
Research by UK landlord and tenant insurance company HomeLet reveals rental prices in the north were 6.4 per cent higher in December than in the same month in 2015. This equates to an average monthly price tag of £602, compared with £565 the previous year.
The second highest rate could be found in the north-east of England at 4.9 per cent, followed by Wales at 4.9 per cent.
The figures were published as communities minister Paul Givan announced proposals for sweeping changes to the private rental sector, where planned reforms include restricting the number of times rent can be increased in a 12 month periods and host of stringent regulations for letting agents.
Across the UK as a whole, rents rose by 1.7 per cent on average in December, less than half the 3.8 per cent rate of rental price inflation in 2015. In monetary terms, this equates an average rental price of £892 per month, compared to £877 the previous year.
In line with recent years, rental price inflation is running ahead of general inflation, which currently sits at 0.6 per cent.
However, HomeLet’s index indicates a slowdown in this increase in the second half of the year, raising questions as to the extent to which landlords will be able to raise rents further during 2017.
Recently, there has been significant industry speculation that landlords may hike up their prices in response to impending changes to mortgage tax relief, which are being phased in from next year.
Currently, tax is due on profits at your highest rate of income tax, meaning landlords paying higher (40 per cent) rate tax could claim tax relief at this increased tariff.
However, this system is being replaced and by 2020 all landlords will be required to pay tax on their mortgage at a fixed 20 per cent, regardless of their rate.
HomeLet’s chief executive Martin Totty said that landlords need to be mindful of tenant’s ability to pay higher prices, especially given the current period of economic instability.
"The private rented sector is now having to cope with a series of disruptive elements, just at a time of great economic uncertainty, and amid a continuing systematic imbalance between supply and demand for residential property," he said.
"The assumption that landlords have sufficient means to bear higher costs will soon be tested. Tenants must hope they do."
In response to proposed plans for reform, Kate McCauley, policy manager with advice charity Housing Rights said they welcome any changes that improve the situation for those who rent privately.
"This sector is now the largest area of our advice work so we are in no doubt that change is required," she said.
"Moving forward, it’s important that the voice and experience of people who rent privately continues to shape government plans."
