Fees Ban: record rent rises in response to Tenant Fees Act
The Association of Residential Lettings Agents says there has been a record number of rent increases reported by its members.
In a market snapshot for June – which was the third month in which the Tenant Fees Act banned fees levied on tenants by agents and landlords in England – ARLA says the number of tenants experiencing rent rises increased to the highest figure on record.
Some 55 per cent of agents saw landlord clients increasing rents during the month, a full 22 per cent up on the previous four weeks which itself had been a previous record high.
Year-on-year, the number of tenants facing rent increases is up from 31 per cent in June 2017, and 35 per cent in June 2018.
Meanwhile letting agents had an average of 199 properties under management per member branch in June, a decrease from 201 in May.
Demand from prospective tenants also increased marginally in June, with the number of house hunters registered per branch rising to 70 on average, compared to 69 in May.
Year-on-year, demand has fallen, from 71 tenant house hunters registered per branch in June 2018.
In June this year, the number of landlords exiting the market remained at four per branch. This stood at the same figure in June 2018.
“Unsurprisingly, rent costs hit a record high in June as tenants suffered the impact of the tenant fee ban. Ever since the government proposed the ban, we warned that tenants would continue to pay the same amount, but the cost would be passed onto tenants through increased rents, rather than upfront costs” notes David Cox, ARLA Propertymark chief executive.
“In addition to the repercussions of the Tenant Fees Act, the proposed abolition of Section 21, coupled with the Mayor of London’s recent call for rent controls, will only cause the sector to shrink further. In turn this will increase pressure on the sector because it will discourage new landlords from investing in the market, causing rents to rise for tenants as less rental accommodation is available.”