Demand to move soars after Tenant Fees Act … but rents up, too
Data from Rightmove suggests that demand from tenants looking for a new home has soared seven per cent since the Tenants Fees Act has kicked in – and that’s seven times the normal increase seen at this time of year.
The figures could suggest people are looking to move earlier than usual, as the peak in demand usually comes in July. There will also be some who have been given a new impetus to move by the removal of most tenant fees, giving them a saving of hundreds of pounds in some cases.
In London the rise was even more acute – there was a 13 per cent increase in demand from May to June, compared to a four-year average of just four per cent at this time of year.
The portal says agents are reporting an increase in enquiries from tenants looking to move now that the majority of tenant fees have been removed.
Meanwhile nationally (excluding London) asking rents are at a record high of £817 per month, and running at 2.7 per cent up on a year ago as rents continue their steady annual rise, Rightmove reports.
The company’s commercial director and housing market analyst Miles Shipside says: “A spike in tenants looking for a new place to live indicates some unsurprisingly held out until fees to start a new tenancy were removed by the government at the start of June.
“The ongoing shortage of quality stock could end up being exacerbated further by landlords whose tenants are now giving their notice so they can move on without paying fees, and some of those landlords then choosing to sell up rather than let it out again.
“The rise in rental prices may also mean some agents or landlords have attempted to raise rents to help compensate for a loss of tenant fees. More build to rent developments with more premium offerings and rents could also be adding to the average increase.”
Rightmove also quotes two agents in support of its data.
Melanie Howarth, branch manager at Northwood in Doncaster, adds: “We’ve seen a massive increase in enquiries and we’re having to do everything differently now, such as arranging to meet lots of tenants at a property all at once. We’ve seen such an influx of interest, I’d say every property is seeing double, maybe triple, the levels of interest that it would have received prior to the tenant fee ban being introduced as it’s now cheaper for tenants to move around from property to property.”
And Richard Davies, head of lettings at Chestertons in London, says: “We’ve seen a 17 per cent increase in the number of tenants registering to view properties since the tenant fee ban came in on June 1 compared to the same time last year. Paying over asking price for rental properties in the peak summer lettings season is not too unusual in London, but we have noticed that tenants are more prepared to do so since the fee ban came in, potentially because they feel they are saving money on additional fees so can afford to spend a little more on their monthly rent to secure the right property.”