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TODAY'S OTHER NEWS

UK rents hit an all-time high

There was an increase in the number of tenants experiencing rent increases in 2019, according to ARLA Propertymark. 

The trade body’s latest report shows that the number of tenants experiencing rent hikes hit a record high this year, rising from an average of 26% each month in 2018, to 46% on average this year. 

The increase is owed primarily to the impact of the tenant fees ban, with 64% of tenants experiencing rent hikes in August – the highest figure seen this year.

As BTL landlords continued to feel the pinch of tax and regulatory changes, the number of buy-to-let investors selling their properties remained high, at an average of four in 2019. In April, the figure spiked to five per branch.

However, the data also reveals that the supply of rental accommodation increased in 2019, from 187 on average per branch in 2018, to 197 this year.

Agents also reported an increased number of prospective tenants searching for homes in August, when 76 were recorded per branch, compared to 73 on average across the year.

David Cox, chief executive, ARLA Propertymark, said: “It’s no surprise that tenants have suffered intense rent increases this year. We predicted this would happen as soon as the government announced a ban on tenant fees, and since the ban came into force in June, rents costs have continued to spiral. 

“Additionally, due to the significant amount of legislation that landlords face, this year they have continued to exit the market, which coupled with Brexit uncertainty and the looming general election has left the sector in a state of despair. 

“Unfortunately, next year could go the same way, unless something is done to make the sector a more attractive investment.”

  • Rob Trotter -  Director with Apropos

    Having navigated our way through our tenant fee ban in Scotland over 7 years ago, with a portfolio of managed properties in excess of 4,000, I can confirm that eradicating tenant fees DOES NOT have a long term negative impact on tenants despite any headline grabbing stories about tenants being penalised by government intervention. Instead, the cost of renting a property is spread out evenly over the term of a tenancy through the adjusted rental values reported in the article above. The result is that tenants don’t have to swallow huge, front-loaded costs, at an already costly juncture for them, and landlords receive a higher monthly income through these rent increases. Previously these front loaded costs were collected and retained by agents. Now we have a system where landlords receive true market rent for their properties and agents can charge those landlords for the service they provide them through increased agent fees.
    It’s simply not fair to make tenants pay for the services the agents were providing landlords. Tenants should only have to pay rent, that rent must be sent to the landlord and the agent should deduct their fees from the landlord. When rents went up in Scotland as a result of the fee ban here, it’s only because previously the agents were keeping all this money to subsidise the service they were, in many occasions, too scared to charge the landlord for, is case it jeopardised their chance of winning instructions.
    History does seem to be repeating itself but English agents should take comfort from their Scottish cousins. Short term pain during this period of readjustment will lead to a better industry which can genuinely work for everyone.

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