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One in three letting agents report rent increases

Over a third of ARLA agents saw rents rise between May and June, the latest figures show.

PROPERTYdrum

rent increase imageA higher number of letting agents witnessed rents increase between May and June, newly released figures from the Association of Residential Letting Agents (ARLA) has shown.

According to the data, 36 per cent of letting agents that are members of ARLA reported that rents rose month-on-month – the highest number since tracking began.

Letting agents in the East Midlands saw the highest number of gains, with 48 per cent of ARLA agents reporting a rise. In contrast, just 17 per cent of agents in Wales saw a hike in the monthly rent.

The report suggested that rents are being forced higher by an ongoing supply-demand imbalance, particularly in London where it states that “worryingly” there were only 118 rental properties managed in June, compared to 134 in May – a fall of 12 per cent.

David Cox ARLA image“It is worrying to see so many agents reporting an increase in the cost of rent over the last six months, especially considering so many people rent as a way to bridge the gap whilst they save to get onto the property ladder,” said David Cox (left), Managing Director, ARLA.

He added, “Findings like this continue to prove that the housing crisis isn’t going to disappear anytime soon and it will take a while before we see steps heading in the right direction. The impact of the Chancellor’s reductions to the amount of tax relief buy-to-let investors can claim – announced in the Emergency Budget this month – will affect the cost of renting over the coming months and is likely to mean it will take even longer to see any improvement in affordability in the private rented sector.”

Separate research carried out by the Residential Landlords Association (RLA) has found that following the announcement in relation to the changes to mortgage interest relief for landlords, which will start to come into effect from 2017, some 65 per cent of landlords are now considering increasing rents.

Alan Ward, Chairman of the RLA, commented: “The reality is that the Chancellor’s belief that rental property is taxed more favourably than homeowners is simply not correct.”

“The belief that landlords should be compared to homeowners is like comparing apples with pears. The two are vastly different. It’s time the Treasury recognised residential landlords as a business,” he added.

August 10, 2015

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