Introduction of Tenant Fees Act Sees Rent Hikes

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The introduction of the Tenant Fees Bill has already seen rent hikes across the country.

According to the latest May PRS Report from ARLA Propertymark, the number of tenants experiencing rent hikes increased to the highest figure on record in May, with 33 per cent of agents witnessing landlords increasing rents. 

Year-on-year, this figure is up to 45 per cent, from 27 per cent in May 2017, and 28 per cent in May 2018.

In May, the number of tenants successfully negotiating rent reductions fell from 1.9 per cent in April to 1.6 per cent. This is the lowest figure seen since January 2016 when it stood at 1.5 per cent. 

The number of properties available to rent dropped marginally to 201 per member branch in May, from 202 in April.

In contrast, demand from prospective tenants increased in May, with the number of house hunters registered per branch rising to 69 on average, compared to 64 in April.

Year-on-year, demand is up 15 per cent, from 60 house hunters registered per branch in May 2018.

It also seems that less buy to let property investors are leaving the private rental sector, with letting agents seeing a slight decrease in the number of landlords selling their buy to let properties. The number of landlords exiting the market fell from five per branch in April, to four in May.

ARLA Propertymark Chief Executive, David Cox, said: ‘As predicted, last month’s findings have shown an increase in rent prices in advance of the Tenant Fees Act coming into force. This rise in the number of tenants experiencing rent hikes is the highest we’ve ever had recorded, and rents will likely continue to rise as they must now cover the agent’s legitimate costs for setting up a tenancy.’

He continued: ‘Competition for properties will be increasing as the supply of properties available to rent falls, but the demand from prospective tenants grows. This ultimately pushes up rent prices on well-managed properties and leaves tenants feeling the pinch.’

It seems that rent hikes could be the norm for the foreseeable future.