Landlords now face the prospect of two unsuccessful tenant applications on average for every successful one, resulting in an increase in the length of time it takes to fill a property, according to online letting agent, MakeUrMove.
The letting agency has seen 67% of tenant applications rejected since the Tenant Fees Act was introduced.
These unsuitable applications could include tenants applying for a property they cannot afford, or not disclosing the possession of a CCJ or previous history of bankruptcy.
MakeUrMove managing director, Alexandra Morris, believes that the impact could lead to landlords having to increase rents in order to cover the cost of properties sitting empty for long.
She said: “What was intended to offer a fairer solution to tenants is seemingly leading to an increase in individuals trying their luck when it comes to applying for a rental property. The investment and risk once associated with applying for rental property have been completely removed, meaning many landlords are now left with rising costs and the prospect of empty properties for longer.
“The housing market in general needs an overhaul, but with the Tenant Fees Act now in place, it’s clear the referencing process is also an area which needs to be revamped. We need to learn from the processes used in online banking and create a tech solution which allows landlords and letting agents to conduct an instant financial check, which looks at a prospective tenant’s income as well as their past rental payments.”
Morris has also warned the government against plans to ban of Section 21 as this will almost certainly adversely affect many buy-to-let investors, leading to a potential mass landlord exodus from the market.
Morris continued: “While we support the government in making the private rental sector fairer for all, many of the new laws favour tenants over landlords. The government risks landlords leaving the market altogether as a result of the increased costs. This would then lead to a lack of supply, and the knock-on effect of rising rents as a result of the increase in demand for rental properties.
“We urge the government to take into account the impact that’s already being felt by landlords as a result of the newly introduced Tenant Fee Act, and ensure that they continue to support landlords under the new legislation.”
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