You are here: Home - Mortgages - Buy To Let - News -

Letting agent fee ban to lead to rent rises in 2017

0
Written by: Adam Lewis
19/12/2016
In the face of the Chancellor’s recent ban on letting agent fees, some 80% of agents expect to raise rents in 2017, according to a report from the Association of Residential Letting Agents (ARLA).

In its November report, its first since the Chancellor’s Autumn Statement, ARLA reported the number of tenants experiencing rent rises fell to 16% in November, down from 18% in October.  However, this didn’t stop eight in 10 letting agents thinking that rates will rise next year as they go about coping with the prospective ban.

Meanwhile, following the increase in taxes for landlords, including Stamp Duty and Capital Gains Tax, a third (63 per cent) of agents said they expect the supply of rental accommodation to decrease in 2017.

This is despite an uplift in supply reported in November, with the number of rental properties managed per branch at 185, up from 180 in October. However, this was considerably lower than the level seen in September, when there were 193 properties managed per branch.

Demand from prospective tenants also fell again in November, as the rental market continues to cool ahead of Christmas; 32 prospective tenants were registered per letting agent branch, compared to 34 in October. However, more than half (53 per cent) of agents said they do expect to see a rise in demand next year.

“The number of rent hikes reported by letting agents continued to decrease in November, and it’s a shame the ban on letting agent fees will have the opposite impact on rent prices when the measure comes into force,” commented David Cox, managing director of ARLA.

“The buy-to-let market is becoming less attractive for investors as the ban on fees, combined with the scrapping of mortgage interest relief and the Stamp Duty increase on second homes push costs up for landlords. So unfortunately, regardless of the uplift we saw in supply this month, we expect to see the number of properties available to rent fall next year.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week