Rents look set to rise as Government ban on tenancy fees comes into force

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Rics forecasts a 2 per cent rent rise at the national level over the course of the next year


Fears that rents are set to rise as a direct result of Government ban on tenancy fees from today could be justified, as landlord representatives claim agents are already reporting rising costs for renters.

A survey of 384 letting agents, carried out on behalf of letting agent trade body Arla Propertymark, has suggested a third of agents saw landlords hike rents in April, up from 30 per cent in March. 

This could spell bad news for renters over the coming months, with prices in some areas of the country looking set to rise. 

David Cox, chief executive of ARLA Propertymark, said: ‘In order to remain profitable, landlords will increase rents to cover the additional fees they are now faced with and as a result, tenants will continue to feel the burn.’ 

 Rics forecasts a 2 per cent rent rise at the national level over the course of the next year

However, the same survey also found that the number of properties available to rent per letting agency has increased over the year, meaning more choice for those looking to secure a rental property – and more pressure on landlords to accept lower rental offers.  

The number of properties available to rent dropped marginally to 202 per letting agent branch in April from 203 in March, still the highest since records began in 2015. Year-on-year, supply is up 13 per cent, from 179 per branch in April 2018. 

The findings follow a recent Residential Landlords Association study which found that a quarter of private landlords are looking to sell at least one property over the next year. 

What is going on? The rise in the number of properties to let comes despite a rise in the number of landlords selling up. 

This indicates that small time landlords with just one or two properties are quitting buy-to-let while landlords with larger portfolios of properties are actually expanding. 

This is Money recently revealed that London-based landlords are leaving the capital in search of better yields in areas like the North and the Midlands. 

The lower capital values in these areas mean that landlords can afford to replace one low yielding London property with two or more higher yielding properties outside of the capital. 

Figures from the Royal Institution of Chartered Surveyors published this month also suggest that overall tenant demand across the country is rising.  

A third of letting agents told Arla Propertymark they saw landlords putting up rents in April

 A third of letting agents told Arla Propertymark they saw landlords putting up rents in April

Does this mean rents are climbing?  

One third of letting agents said they witnessed landlords increasing rents, up from 30 per cent in March, according to the Association of Residential Letting Agents.

Year-on-year, this figure is up from 24 per cent in April 2017, and 26 per cent in April 2018.

But this doesn’t necessarily mean that a third of tenants have seen rent rises – only that a third of agents have seen one or more of their landlords increase rents.

The actual number of tenants experiencing rent rises could be much smaller.  

The number of tenants successfully negotiating rent reductions did fall however, from 2.9 per cent in March to 1.9 per cent in April. 

This is the lowest figure seen since May 2016 when it stood at the same level.

Overall, rents are projected to rise to by around 2 per cent at the national level over the coming 12 months, according to Rics, with growth then accelerating to an average of 3 per cent a year over the next five years. 

New rules for buy-to-let  

The Tenant Fees Bill, in force from today, sees a ban on landlords and letting agents in England charging tenants any additional fees when they sign up for a new rental property.

Fees  are now limited to charges for replacement keys and late rent payments only.

Security deposits are capped at the equivalent of five weeks’ rent, and holding deposits to one week’s rent.

Government analysis suggests tenants will on average save around £300 every time they move house as a result of the ban.

The Tenant Fees Ban comes in on Saturday, and will stop tenants being charged additional fees

The Tenant Fees Ban comes in on Saturday, and will stop tenants being charged additional fees

However, some have speculated that letting agents will pass some of these costs onto landlords, who in turn could raise rents to cover their higher costs.

Landlords are also worried about the proposed abolition of Section 21, which would ban ‘no fault’ evictions, where landlords can give tenants notice without having to give a reason.

The Government’s proposal to scrap this has been seen as a major victory for campaign groups who have long argued that this would put an end to so called ‘revenge evictions’ by unscrupulous landlords.

Cox said: ‘As predicted, April’s findings have shown an upsurge in the number of landlords selling their buy-to-let properties.  

He added: The Tenant Fees Act, coupled with the proposed scrapping of Section 21, is forcing landlords to either increase rents or leave the market altogether.’ 

Tenants call on London Mayor Sadiq Khan to ban adverts for holiday lets 

Over 8,000 Londoners have called on Sadiq Khan to ban adverts encouraging landlords to ditch tenants for Airbnb-style lettings.

The petition was started by campaign group Generation Rent, and comes after Hostmaker, a property management company, paid for adverts on the Transport for London network that suggest landlords can earn 30 per cent more by switching to holiday lets.

Generation Rent campaigner Georgie Laming said: ‘These tube ads are feeding a narrative that tenants are disposable, and profiteering from property is more important than providing long-term homes. 

Campaign group Generation Rent protesting the advert in London this morning

Campaign group Generation Rent protesting the advert in London this morning 

‘They are encouraging landlords to take homes off the market and turn them into hotels that will be often left empty, contributing nothing to the local community.

‘If Sadiq Khan is truly committed to making housing affordable in London then he needs to ban ads like these. Unregulated holiday lets are driving up rents and preventing tenants from making a house a home.’



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