Fewer tenants are experiencing rent increases, according to the Association of Residential Letting Agents (ARLA) monthly Private Rental Sector (PRS) Report.
The number of letting agents reporting rent increases for tenants fell to a quarter (25%) this month, compared to 32% in September – meaning the number of rent hikes in October is the lowest reported this year.
Demand for rental properties dropped in October, alongside supply of available housing – a trend typical of the time of year. ARLA agents registered 33 new tenants on average per branch this month, the lowest amount this year.
However, the London rental market bucked this trend. The report found that demand for rental housing in London continued to increase in October – with an average of 42 prospective tenants registered per branch, up from 39 in September – an 8% increase.
Supply of rental accommodation decreased in line with demand, dropping from 182 properties on average per branch in September, to just 173 in October. However, prospective renters in the East of England and the South West will have better luck finding a property; agents in those regions managed more properties in October than September, with 199 and 184 properties managed respectively.
ARLA managing director David Cox said: “Finally, some good news this month – fewer agents reporting rent increases should bring some relief to tenants before Christmas. It’s definitely a step in the right direction, however a quarter of tenants are unfortunately still seeing hikes.
“Although it’s typical that demand dropped at this time of year, as there’s a seasonal lull in the run up to Christmas, we except to pick up again in January.
“Looking ahead to next year, we’d hope to see the number of tenants experiencing rent hikes remain low with supply and demand levelling out. However, a lot is resting on the economic and political agenda. We’re still waiting for new houses, promised by the Prime Minister to be built. Whilst this will take pressure off the rental prices as supply rises, the changes to landlord tax proposed under the Finance Bill is likely to discourage new landlords from entering the market.
“Further, it’s been a waiting game all year to see if Mark Carney will raise interest rates in the New Year – this will play a big part in determining whether renters looking to buy a home will be able to afford to. And when interest rates do rise, the goal of homeownership will be pushed further out of reach for many and of course put further pressure on the private rental sector.”