Rents rise following Tenant Fees Act
The latest ARLA private rented sector report confirms what was feared as a result of the implementation of the Tenant Fees Act, which came into force on 1 June. Last month’s findings have shown an increase in rent prices in advance of the Tenant Fees Act coming into force. The rise in the number of tenants experiencing rent increases is the highest ARLA has ever recorded and rents are likely to continue to rise as they must now cover the agents’ legitimate costs for setting up a tenancy. These costs in many cases have been passed on to landlords.
In addition to this, competition for properties will be increasing as the supply of properties available to rent falls, but the demand from a prospective tenant grows. This ultimately pushes up rent prices on well managed properties and leaves tenants feeling the pinch.
Andrew Luxton MRICS FARLA
, Partner in charge of Stags Residential Letting Department is unsurprised by this recent pattern, stating it an “obvious result of the Government’s poorly implemented tenant fee ban.” He continued, “we lobbied hard when the legislation was passing through parliament as it was clear that if implemented the legitimate costs charged by agents in setting up a tenancy would partly be passed on to landlords. Landlords as a result of this and as a consequence of lower returns will ultimately look at rent in order to compensate for their losses.”
Over the period of a two to three-year tenancy, a tenant will ultimately pay a lot more than a standard referencing or application fee. This is coupled with a decreasing supply of properties coming to the rental market again as a result of the government making a buy-to-let investment less attractive.
With increasing demands placed on landlords, Stags has seen a significant increase in the number of instructions for our full management services, as many landlords switch from let only or tenant find to full management. It is becoming clear that letting a property is now far more complicated than it was and is often beyond the remit of many landlords.
If you require advice about any aspect of the letting or management of your property or wish to discuss our services, do not hesitate to contact one of our Lettings offices today.