There’s some bad news for private rental sector tenants across the UK, as the latest report from ARLA Propertymark shows that the number of tenants whose rent has increased, has risen for the first time since September 2018. The property body said that the increase came amid a rise in demand and is also likely reflective of landlords’ reaction to numerous fee rises and charge increase in recent years.
According to the latest monthly ARLA PRS report, 26% of lettings agents said landlords raised their rents during January. That’s up from 18% in December and the biggest gain since September 2018, when 31% said rent had risen.
Rental supply and demand both rise
The survey also showed that not only were rents rising, but both the supply of rental properties and demand for them were both notably higher in January than December.
ARLA data shows there were 197 of PRS rental properties available in January, up from 193 in December. Meanwhile, the average number of prospective tenants registered per lettings agency branch surged to 73 in January, from 50 a month earlier. Or, put another way, an increase of 46%.
The survey data were described as a “huge blow for tenants,” by ARLA’s chief executive, David Cox.
Separate data from the Office for National Statistics, (ONS) meanwhile, also highlight that private sector rents rose in January. The ONS calculate that in January 2019, PRS rents were 1% higher than a year earlier.
That data gave a breakdown, showing:
- In England, PRS rents rose 1.1% on the year.
- In Wales they rose by 1.1% over the same period.
- In Scotland rent were 0.7% higher in January 2019 than January 2018.
- For London tenants, rents rose 0.1%.
More rent rises on the way?
According to ARLA’s chief executive, the increase in rents reflects Government action in recent years, which has led to higher charges and additional costs for PRS landlords.
“With demand increasing by 46% from December, and rents starting to rise in response to all of the cost increases landlords have experienced over the last few years, tenants are in for a rough ride,” Cox said. “Last month, there were three landlords selling their buy to let (BTL) properties per branch, and as landlords continue to exit the market, rent prices will only continue to rise.”
Looking ahead as the Tenant Fees Bill comes into force, Cox said tenants are likely in for further rent rises.
“With the Tenant Fees Act passing its final hurdle in the House of Commons and receiving Royal Assent this month, tenants will continue bearing the brunt, as agents and landlords start preparing for a post-tenant fees world,” Cox said.
He’s not alone in sharing the view that new legislation ending lettings agent fees and capping deposits, will result in higher rents as landlords and agents seek to ensure the rental income isn’t diminished by the new rules.
However, even though rents might continue to rise throughout 2019, the lack of additional charges for tenancy checks, combined with the deposit cap, should make it a little easier for tenants to move between homes as they initial cost will be lower.
In addition, the incoming Bill, added to other measures, should work to encourage all landlords to provide safe and comfortable homes for their tenants. It could even result in longer lettings contracts for tenants, which is one of the aims of Government intervention in the PRS.