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High demand for rental homes following introduction of the tenant fee ban

There has been a significant rise in tenant demand in recent weeks after the change to tenant fees came in on 1st June, new figures show.

Demand from tenants looking for a new place increased 7% between May and June, an uplift seven times bigger when compared to the previous four-year average of just 1% at this time of year, according to fresh data from Rightmove.

The research could suggest people are looking to move earlier than usual, as the peak in demand usually comes in July. There will also be some who have been given a new impetus to move by the removal of most tenant fees, giving them a saving of hundreds of pounds in some cases.


In London, there was a 13% increase in demand from May to June, compared to a four-year average of 4%

The increase in demand, coupled with the growing rental stock shortage, is placing upward pressure on rental values.

Nationally average asking rents, when excluding London, hit at an all-time high of £817 per month in the second quarter of the year, with the annual rate of 2.7% showing the same steady rise for the last three quarters.

Rightmove’s commercial director and housing market analyst, Miles Shipside, said: “A spike in tenants looking for a new place to live indicates some unsurprisingly held out until fees to start a new tenancy were removed by the government at the start of June.

“The ongoing shortage of quality stock could end up being exacerbated further by landlords whose tenants are now giving their notice so they can move on without paying fees, and some of those landlords then choosing to sell up rather than let it out again.

“Asking rents are at a new record, rising at nearly 3% a year as demand for quality properties outstrips supply. However, the rise in rental prices may also mean some agents or landlords have attempted to raise rents to help compensate for a loss of tenant fees. More build to rent developments with more premium offerings and rents could also be adding to the average increase.”

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    Prospective tenants now have nothing to loose by applying to rents properties that they will not be accepted for, agents can look forward to an influx of time wasters trying it on.

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    Regardless of no Agent fees to the tenants yes time wasters will abound but vetting will be more stringent as cost to LL will increase. I envisage more Professional LLs will advertise themselves or only deal with professional LAs who apply commensence to their fee structure. This will be, sort out time,for the flash socks 4x4 LAs and those providing a fair service. Next 12 months will sort the LAs out?


    Yes there are a number of agents as you describe that will disappear, good agents will survive .

  • Andrew McCausland

    We have already seen a marked increase in people applying for several properties from different agencies to see which they are accepted for the quickest - wasting the agents and landlords time and money in the process. This was one of the many problem areas we saw coming, discussed but were disregarded by the government.

    As an agency we now ask prospective tenants to complete a pre-application form and take a holding deposit before going through the application process and paying for vetting. We only keep the holding deposit if the tenant has lied on their pre-application form (eg having a CCJ when they denied this). This saves some time and recuperates a small amount of our losses but does not put off the multiple applications crowd.

    It is only going to get worse and agents will have to pass the full costs of these time wasters on to the landlords. Will landlords put rents up to cover these losses? They should do.

    • 20 July 2019 15:59 PM

    You don't need to do anything that you are doing.
    Just join LRS.
    Then you can have a free checkmyfile link sent to the prospective tenant who then uses the link and then shares the full reports with you.
    That means you will be able to see hard credit searches etc which wouldn't ordinarily be the case.
    All free so not affected by the TFB.
    I guarantee that 80% of them won't bother sending you their 3 credit reports.
    So that will have saved you a load of unnecessary work.
    Have a chat with LRS they provide a far superior service than the usual suspects.

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    Since the SNP's crazy new PRS legislation in December 2017, which abolished tenant fees and allowed them to leave on 28 days notice at any time, we have seen much shorter tenancies and had to pay higher LA fees more often - so much for their stated aim of letting tenants feel more secure in a long term home! The only saving grace is that now we're using LA's more and having a higher turnover of tenants, our rents have gone up much more much faster as the LA's have kept an eye on what the market will bear. Like all SNP policies it has backfired on the tenants. The same will happen shortly in England.

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    Where are they getting those imaginary Rent increases from, not West London. I had a good quality 3 Bed Flat in Acton vacant for months, only 2 lots of potential Tenants that would be paying for themselves, although 30 lots of free loader family’s, 4 lots of Rent 2 Rent, 6 lots wanted to sub-let with Airbnb which is amazing they were clearly going to make far more that me and not even own a property themselves, and loads are doing this one guy tell me they had 40 properties this way & couldn’t understand why I wouldn’t take the bate. 2 lot purporting to be from 2 different Councils offering me £200 pcm more than advertised price but for families with problems. I think that I have enough problems myself. Where are the self paying Renters gone, professional, White or Blue collar. The property is actually a HM0 which is a distinct disadvantage at huge cost & incumbents to me.

    • 20 July 2019 16:11 PM

    Hmm!!! Obviously lots of criminality going on.
    Wonder if the AirBnB mob appreciate that if a lender finds out the mortgage could be called in.
    Freeholders if they find out will call in the lease.
    These chancers are taking big risks.
    But because of your experience and the fact that are seemingly too few proper tenants out there would you consider it appropriate to reduce or move your rental properties to different areas where perhaps the supply of better tenants can occur.
    Personally if I was a London LL with the threat of rent controls I would be selling up and investing still in the SE but outside the M25.
    Unless you intend to operate in the black market if rent control occurs you'd be better off away from it all.
    I charge £1450 for a 2 bed flat 45 mins train journey from Liverpool St.
    Have no problems at all in sourcing reasonable tenants though I must admit only one of them ever qualified for RGI................................... which I had to claim on!!!

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    Hi Paul you are right lots of Criminality going on especially with Airbnb. They lease your property, rent it for double or triple, its happened. They are laughing all the way to the Bank doing us harm, not their property and at end of day if it’s all goes wrong it’s the owner gets clobbered. I will have nothing to do we Black Market better to run straight ship and there are enough trip wires even at that.

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    Fees were a way of binding tenants to a property. In other words fees were an expensive part of moving. No fees so easy to move!

    I see rents going up again or maybe we can have a tenant leaving fee? Might work as the bans are for upfront new letting fees.

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    • 21 July 2019 18:08 PM

    The tenant fee ban and deposit restriction is very easy to beat.
    This is how you do it.
    The additional 3 weeks deposit is included in the alleged rent.
    The costs of referencing are included in the rent.
    At the end of the 6 month tenancy the tenant surrenders their tenancy.
    The following day a new 6 month tenancy is issued at a lower rent.
    This means returning the 5 weeks deposit so deposit protection is required again.
    Plus all the other stuff required which includes cancelling the Council Tax account and then starting a new one with the same occupants the following day.
    At the end of the 2nd 6 month AST the LL issues a S13 for an increased rent if desired.
    When the tenants eventually vacate they will receive their 5 weeks of deposit plus if everything is OK they would also receive a very generous goodwill gesture from the LL which funnily enough will be the same amount as the 3 weeks additional deposit.
    There is no way that any of these circumstances can in anyway be proven to contravene the TFA or Deposit REGULATIONS
    Yes it involves a bit more paperwork by the LL and necessarily this process is something that will only be bothered with by self-managing LL.
    Of course many LL who have LA managing for them would have slightly different problems due the imperative of LA wanting to make money off of LL.
    As LA currently control most tenancies inevitably this will lead to a general uplift in rent.
    Consequently even self-managing LL will be tempted to follow those increased rents even though they are able to manage on less based on my strategy to still have 2 months rent as a deposit and for referencing fees to be built into the 1st 6 month AST.
    In any advert I would specifically state that for a 2nd 6 month AST the rent would reduce to a lower amount.
    Any tenant would be able to work out that the monthly rent reduction over 6 months funnily enough equals the referencing fees and the additional 3 weeks deposit.
    There is no lawyer in the UK that could prove what I would do contravenes deposit or TFB regulations.
    Though I can see that the temptation to keep the rent the same as at the outset of the AST.
    I can see how rent creep could easily occur.
    I would be very tempted myself!
    But if I give an undertaking at the outset of the first 6 month AST as to what will occur for a 2nd AST I will not go back on my word irrespective of what happens to rents in the meantime.
    I only every increase rents annually even though I accept I could increase every 6 months with a new AST.
    I have never seen this as fair.
    But come what may I will by circuitous legal means still have my 2 month's of deposit and reference fees paid for by the tenants.
    Such tenants will be pre-checked using LRS before a full RGI reference check is carried out.
    This will be about £40 per tenant but this will be only one fee as I will not be paying for multiple reference checks.
    Tenants who believe I would be prepared to do this will be sadly deluded.
    Inevitably this means the vast majority of tenant applicants will fail my stringent tenant checks.
    No tenant is ENTITLED to be offered a rental property.
    Tenants will be in for some tough times as LL become ever more selective due to all the recent stupid regulations.
    Most tenants will fail stringent pre-referencing checks.
    Mine will be a requirement to see all 3 full credit reports of the tenant applicant.
    Most tenants are too stupid to appreciate that a LL will require to see them and so such tenants will lose out to those tenants who are able to provide the LL with their full credit reports.
    It seems that Tenant Referencing Passports for purchase by tenants have been withdrawn from sale due to the ambiguity as to whether such a purchase by a tenant could be construed as a LL requirement which is specifically banned in the TFA.
    So any consumer tenant or otherwise should by now have signed up to access their free credit reports.
    Anyone who hadn't must be a bit of a thicko with modern life so dependent on accurate credit report info.
    So if a tenant prospect can't be bothered to provide their free full credit reports to you would you wish to even consider such a thicko tenant!!!!???

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    Unfortunately I can't put up rents even though mine are too low. The self paying tenants are not available only thousands of Housing benefit tenants, housed for free or subsidized housing they are not stupid, the system is there especially for them, they are king, enough said we all know whats going on.
    The help to buy disaster scheme distorting the whole market to make millions for the big developers or even millions for their individual Directors, like one guy alone £75m then he resigned sure he couldn't be working so much money for himself on the back of this Scheme. Houses not selling mostly because of the Stamp duty hike, so the confidence is gone out of the market, isn't that what they call a recession. Existing flats not selling even good quality because of the rogue help to buy Scheme that's abused, just imagine getting up to 40% of the money up to £600k interest free for 5 years in England (£300k in wales) many of those people are earning £80k pa and could have bought anyhow. Compare an existing Flat for sale that is not subsidized and loaded with Stamp Duty, to a Brand New subsidized Flat with only 5% deposit and Zero Stamp Duty (no contest). When all this madness stops and we are Bankrupt, our Flats vacant and our tenants living in subsidized new Flats from our taxes where are the jobs going to come from ?. It's nice to know we have a level playing field just like Mountain,

    • 21 July 2019 18:40 PM

    Yep I must admit that the mantra from the likes of me and other LL about increasing rents is all very well.
    But as you pointedly suggest there is in some local markets no possibility of increasing rents to cope with increased costs.
    That leaves the LL with a bit of a conundrum.
    Whether to remain in that market taking an effective income reduction or to sell up and invest where rents are able to be increased.
    As a leveraged LL there is no way I would accept a reduction in my income due to increased costs.
    If unable to increase rents I would sell up out of that market and invest elsewhere or I might deleverage to ensure the income remains the same.
    This could be a difficult calculation to make when you factor S24 into the overall equation.
    But we are surely getting to the stage as you are experiencing that with rent increases not possible that particular market is no longer worth being in.
    The HTB madness needs to be adjusted.
    So allow HTB for any Residential property for £350000 or less.
    I would also introduce MIRAS for these buyers.
    But as soon as they move ALL the benefits of HTB and MIRAS would be removed.
    This would encourage FTB to buy and stay.
    £350000 is more than sufficient to buy a 3 bed terrace property outside of London.
    HTB and MIRAS should not be available to enable FTB to buy in one of the most expensive capital cities of the world.
    FTB can buy outside of London and commute


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