The UK’s private rented sector registered its highest ever rental values in summer 2019 according to the Association of Residential Letting Agents (ARLA). Almost two-thirds (63 per cent) of the association’s members noted rental rises in July, with some areas of the country seeing 86 per cent of tenants experiencing rises.
“Following the Tenant Fees Act coming into force in June, rents have continued to rise, which we believed would happen,” said David Cox, ARLA chief executive. “The fees agents have been banned from charging are still being paid for by tenants, however it’s now through their rent, rather than upfront costs,” he added.
Letting agents across the country have around 184 properties under management on average, down from 199 earlier in the summer, along with 73 prospective tenants – up from 70 in June. This narrowing of supply and increasing demand has contributed to the rising rental values, according to ARLA, since it “further increases competition in the market, which only pushes rents up or forces landlords to exit the market,” said Cox. He fears that increasing legislation will place further pressures on the market.
Property agents point out that the government’s aim in banning letting fees was to make renting property more affordable. Yet the outcome of its actions has been to raise rents across the board, the opposite of its ambition.