Tenants warned to strap in for ‘rocky ride’ as fees ban approaches

Tenants finished 2018 in the driving seat as fewer experienced rent increases, ARLA Propertymark claims, but has warned that the impending fees ban means many will be set for a rocky ride this year.

Its latest PRS Report found that the number of tenants experiencing rent increases fell for the fourth month running in December, with 18% of agents reporting that landlords increased rents, the lowest figure for a year.

Meanwhile, agents responding to the survey reported that the supply of properties available to rent rose to 193 in December, up from 183 in November, but down from 200 a year before.

Demand has also fallen, decreasing from 55 to 50 between November and December and down from 59 in December 2017.

David Cox, chief executive of ARLA Propertymark, said: “Although December’s figures indicate that tenants finished the year in the driving seat, they’re in for a rocky ride this year.

“With the Tenant Fees Bill passing its final hurdle in Parliament last week, it is now waiting to receive Royal Assent before being passed into law and implemented on June 1.

“This means it’s only a matter of time until we could see rent prices starting to creep up again.

“As we’ve said repeatedly, landlords have faced continued regulatory change and increasing costs over the last few years, and the tenant fees ban will only add to this burden, meaning many will either have to start increasing rents for tenants or exit the market.”

Data from estate agent haart shows its offices have also seen a monthly drop in rental property supply from landlords and demand from tenants, down 9.4% and 0.8% respectively.

However, on an annual basis the agent has reported 33.7% more tenants registering for properties and 7.8% more homes coming up for rent.

Its offices also reported that sales to landlords increased by 17% annually across England and Wales in December 2018.

Similarly, on the sales side it saw a monthly drop in demand and supply, but said on an annual basis new buyer registrations were up 12% and listings increased 22.7%.

Exchanges were up 13.9% between November and December and 18.4%  annually, haart said.

Paul Smith, chief executive of haart, said: “Last year was dictated by depressed market activity as would-be buyers and sellers took stock in uncertain times. But this has created huge pent-up demand in the market, and we saw buyers return to in the usually quiet final weeks of the year, despite ongoing Brexit drama.

“Over the Christmas and New Year period we experienced higher than usual footfall in our branches and phone activity was also up – a very reliable indicator of where the market is headed. The number of applications in the first two weeks of January is already up 4% on the year, and the number of listings is up by almost 30%.

“The Brexit negotiation period is being drawn out longer than we anticipated, but evidently, buyers are not prepared to put their lives on hold forever. Clearly – the market is starting to move on.”

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2 Comments

  1. Rayb92

    Yet another government policy claimed to help tenants, yet the headline says it all.. expected to backfire.

    Report
  2. Woodentop

    Its not just the rent that will rise … rejecting tenant will also rise?

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