A lettings market snapshot from Rightmove this week suggests asking rents are now increasing at an annual rate not seen for four years. Nationally outside London, there are 10 per cent fewer rental properties marked available compared to this time last year and the North West has seen the biggest increase in tenant demand.
The drop in buy to let activity and increased demand from tenants, coupled with the upcoming lettings fee ban, has led to a lack of choice and increased rents for tenants.
Our Lettings Director Simon Westwell said “We’ve seen on average an increase of 3per cent on rents, due to lack of supply and the letting fee ban.”
The Letting Fee ban was first announced back 2016 and last week it has was confirmed it will come into effect from 1st June 2019. Under the new legislation, the only fees renters can be charged are: the rent, a refundable security deposit, a refundable holding deposit and what will be known as ‘default fees’. At the moment, tenants are charged a fee for the work required in order to set up their tenancy agreement including credit checks, referencing and inventories. As these checks will still be required it is likely to mean that agent’s fees to Landlords will be increased who will then pass this cost on in higher rents.
Simon went on to say “Whilst I understand the logic behind the ban I don’t necessarily agree with it and a fairer system would have been a cap with fees. We now have to accept the decision and move on. We at Petty’s have started making plans when the letting fee ban comes into place but unfortunately some agents will cease to trade when the ban starts in June this year and only the best agents will survive. This will have a knock on effect and make things more difficult for tenants as well as landlords, further exacerbating the lack of supply and as Relocation Network Agents I think we at Petty’s are more aware of this than most. This year I can see demand far exceeding supply so further rent increases should be expected as the year progresses.”