Interest rates 'unlikely to increase rental costs'
Letting Agents - 12/12/2006 16:38:10
Landlords and letting agents are unlikely to put up rent prices because of interest rate hikes, according to the Council of Mortgage Lenders (CML).
Those renting out properties are seeing their costs increase along with the rest of the country but according to the CML this is unlikely to result in them increasing prices for tenants.
Bernard Clarke from the CML has said that this is as the rental market is based on supply and demand and increasing rents would not be in letting agents' best interest.
Mr Clarke said: "I think generally rents are driven by supply and demand for rented property.
"I'm not sure that landlords have the capacity to impose rent increases on their tenants simply because their own costs have gone up."
Additional research by the Bank of England has shown that ten per cent of those renting have unsecured loans larger than their annual income and do not have the luxury of having equity held in property to fall back on.
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