The true effect of the Tenants Fees Act became a little clearer in June, the month it was enforced, after tenants experienced record rent increases for the second consecutive month and landlords continued to leave the sector.
According to June’s ARLA Propertymark Private Rental Sector (PRS) report, 55% of tenants were the victim of a rent increase. This has also jumped by over a fifth (22%) from May’s record high.
It also marks a significant increase when compared with historic year on year increases to June. Despite a marginal gain between 2017 and 2018, the 31% and 35% rent increases imposed for the year to June respectively pales in comparison to the figures from June 2019.
A number of changes to the buy-to-let sector has prompted many landlords to reduce their portfolios or leave the sector altogether. The 199 properties registered per letting agent branch has decreased from 201 in May.
However, this figure has increased from the 191 properties registered in June 2018. That being said, June’s total is the lowest figure for 2019 since January and February when 193 and 197 properties were registered per branch.
Despite these changes, tenant demand for rental property is only increasing from 69 registered house hunters in May to 70 in June.
David Cox, ARLA Propertymark Chief Executive, said:
“Unsurprisingly, rent costs hit a record high in June as tenants suffered the impact of the tenant fee ban.
“Ever since the Government proposed the ban, we warned that tenants would continue to pay the same amount, but the cost would be passed on to tenants through increased rents, rather than upfront costs.
“In addition to the repercussions of the Tenant Fees Act, the proposed abolition of Section 21, coupled with the Mayor of London’s recent call for rent controls, will only cause the sector to shrink further.
“In turn this will increase pressure on the sector because it will discourage new landlords from investing in the market, causing rents to rise for tenants as less rental accommodation is available.”
Do you think the changes to the buy-to-let sector will continue to deter investors?
