The start of consolidation within the lettings industry caused by the looming tenant fees ban have been called by the Association of Residential Letting Agents (ARLA) in its latest rental sector snapshot.
The trade association suspects that a 3% surge in the supply of rental properties is the result of agents selling up or merging their businesses. The number of properties available to rent per branch during March increased to 203 from 197 in February, ARLA says.
“The full effects of the tenant fees ban have not yet been felt, and now the Government is introducing yet more new legislation which will deter new landlords from entering the market, such as abolishing Section 21,” says David Cox, Chief Executive of ARLA (below).
“Until we have greater clarity on the changes planned, this news will only increase pressure on the sector and discourage new landlords from investing, meaning rents will only continue to rise for tenants.”
The ARLA commentary reflects recent warnings from several lettings agencies that the fees ban is likely to have significant repercussions for the industry after its partial introduction on June 1st.
Only a few weeks ago Exeter agency Star Letting and Property Management warned that “the upcoming tenant fees ban and Brexit will affect many more lettings agencies around the country in the coming months”.
And earlier this month franchising giant TPFG made the extraordinary suggestion that the lettings fees ban is part of a deliberate government plan to eliminate smaller lettings agencies from the market.