Eight out of ten letting agents expect the tenant fees ban to be passed on as increased rents while reduced supply and increased demand will also contribute to upward pressure on rents, says the Association of Residential Letting Agents (ARLA).
It canvassed 917 of its members over the past two weeks and found that 53% also expected to see increased competition for rental property during 2017 and 63% said there would be a drop in the number of privately rented properties available within the market.
“I manage around a dozen properties for one of my clients and I spoke to her recently about the tenant fees ban,” says Brighton letting agent David Burt.
“She made it clear to me that she wasn’t going to pay extra for the referencing or any of the other costs associated with acquiring tenants for her properties that tenants normally pay, so I’m going to have to consider putting up the rent so that my percentage management fee rises instead. Otherwise I’ll be working harder for less money.”
ARLA says the recent increase in Stamp Duty for landlords and the reductions in personal tax and capital gains tax allowances are pushing up costs for landlords before the tenant fees ban even comes in, and that this is already reducing demand for buy-to-let properties.
“The BTL market is becoming less attractive for investors,” says David Cox, ARLA’s managing director (pictured). “We expect to see the number of properties available to rent fall next year.”