Dorian Gonsalves, boss of 300-outlet franchising chain Belvoir, is predicting on-going rent rises after the Government’s attacks on the private rented sector. He is also forecasting that disillusioned independent letting agents may want to leave the sector this year.
He said: “Agents nationwide have been predicting that rents are likely to rise considerably faster than house prices and Belvoir is forecasting that rents are likely to rise by up to 15% over the next three years.
“This rise in rents, which will of course vary from region to region, is primarily due to a raft of recent anti-landlord government policies in the past year, which include increasing Stamp Duty costs, introducing tougher mortgage lending criteria, and removing mortgage tax relief for landlords, which could see many landlords making a loss.
“In addition, the Government’s failure to increase the availability of social housing for rent has resulted in a real shortage of good quality rental accommodation in the private rental sector.
“Although the Chancellor confirmed in his Autumn Statement that upfront tenant fees are to be banned, the full details have not yet been clarified and no timescale has been given. Until these details have been finalised, which could take many months, it will be very much business as usual.”
He said frachisees in the network would however be looking at ways to protect their businesses, adding: “We already have over half of the Belvoir network offering an estate agency service, and I predict that this number will grow considerably in the year ahead.”
He went on: “Throughout 2017 Belvoir will continue to work with decision makers and we hope that some of the Government’s recent changes will either be reversed or incentives will be launched to help drive up the supply of rental properties. This would then bring down rents and benefit millions of tenants, making for a healthier rental sector.
“People from all walks of life, including students, migrant workers and professionals with families, are struggling to meet stringent lender affordability ratios. When someone is not in a position to buy, they obviously start looking for somewhere to rent, but unfortunately, government policies seem to lack any direction, and have done nothing to benefit either landlords or tenants, so tenants could find it more difficult to find good quality suitable accommodation this year and beyond.
“I also think that a number of independent agents may seek to exit the market during the year.”
He said that if they do, Belvoir franchisees could be interested in buying their businesses. He said: “Belvoir will be continuing its acquisition programme, looking for opportunities for our franchise owners to help them increase their market share.
“Belvoir has learned a lot from our Scottish offices, where tenant fees are already banned.
“I predict that this year will be one for agents to adapt and change, as the impact of the Government’s recent anti-landlord policies take effect and the market readjusts.”
It’s not a bad consequence of the intended changes if a few rogue or ‘nice but dim’ independents disappear from the market completely. The real pressure is on the ‘corporates’ who have high overheads, who will struggle with the changes.
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Nice sales pitch but lets clarify one thing here
“Belvoir has learned a lot from our Scottish offices, where tenant fees are already banned.”
They weren’t banned the law was clarified. The law was already in place and it may just be a play on words but it is talk like this that has helped the ban become a reality
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I run a lettings agency and feel we make a fair charge to both tenants and landlords given the preparation and work that we do. My nephew is currently looking for a student house in Winchester however and last week paid, along with 5 other students, an admin fee of £300. £1800.00 in tenant admin fees to an agent that doesn’t publish their tenant fees on their website but does publish landlord fees as being 50% set up charge plus an inventory charge. When all added up, that agent will be earning fees in excess of £3000.00 at the outset of the letting!!
These are the type of agents that should be acted against, not those of us who are being fair. That agent was advertising 7 or 8 6 way student lets, pass that on to landlords? I don’t thjnk so!
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Jeremy
Winchester is like London, full of of agents taking the p$%s
they have ruined it for people like yourself and the the majority of good agents who charged a fair fee for the services provided
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I think the issue in Winchester (& also where I operate on the South Coast) is the complete disinterest of Trading Standards to act when agents are clearly ignoring legislation (even when tipped off!), for example to display fees.
Last week I reported an agent to TSO because the agent who is situated in the next town to us and was showing just 2 properties on their own web site suddenly had 20+ new instructions in this town advertised on Rightmove, all without photos and all with completely wrong pricing! Believe me if I could get 20+ new properties in a year I would be very happy indeed! TSO decided not his job so I tried advertising standards – automated response said they would get back to me within 14 days! I reported to Rightmove – their response: –
Thank you for your feedback, I can assure you we look into all queries we receive. I have had a look into the agent’s listings and all is appearing as it should be. If you come across any more examples of false listings please send these across and we shall be happy to look into this for you.
In the end I did it myself by naming and shaming the agent on Twitter – within minutes all new instructions were gone!
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