We believed fees ban would push up rents – ARLA

9:07 AM, 28th August 2019, About 5 years ago 6

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The latest survey of ARLA agents show a record number of rent increases for tenants in July with 63% of agents reported that landlords raised rents, This is up from an already record high of 55% in June, and over double the reported rent rises in the same month last year.

ARLA have issued an unsurprising ‘we told you so’ to government as the ban on fees is feeding through to rent rises instead. Although there have been no statistics to date as to what percentage the rent increases are covering the loss in fee income.

Supply of rental property from agents has also decreased from 199 to 184 per branch on average between June and July. The number of landlords exiting the market remains stable over the last year at 4 per branch per month

Chief executive of ARLA Propertymark, David Cox, said: “Following the Tenant Fees Act coming into force in June, rents have continued to rise, which we believed would happen. 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.

“The fall in the number of properties available further increases competition in the market, which only pushes rents up or forces landlords to exit the market entirely.”

“As the sector faces increased levels of legislation, it’s evident this is putting even more pressure on the industry.”

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Simon Williams

10:21 AM, 28th August 2019, About 5 years ago

I read with interest an article today from the Manchester news online saying that a big new rental company backed by the city council is demanding up to 5% rent increases from tenants and issuing them with section 21 notices if they don't comply. Apparently, renters were told when they first signed up with the company that they would get a new kind of "equality of treatment" very different from the small private landlord, who as per usual, were cast as the local villains. The City council got in on the act and gave the company strong backing in the sales blurb.

One year in to their contracts, they are told - here's your section 21 notice. You can have a new contract for a year with a 5% increase or be locked into a contract for 3 years with a 3% increase. The tenants are all very unhappy apparently. Wasn't really the "equality of treatment" they were expecting. Most tenants will have to opt for the 5% package as they don't have the certainty of circumstances for a 3 year contract.

So, I say to tenants - welcome to the new world where scarcity of investment caused by rising landlord costs, including tenant fees legislation, means your big "friendly" corporate landlord can increase its rent at twice the rate of CPI inflation and you'll probably have no option but to accept it because the local competition is diminishing daily.

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Gromit

10:36 AM, 28th August 2019, About 5 years ago

Q. Who would have thought that rents would go up as a result of the Tenant Fee Ban?
A. Obviously not MPs, nor the likes of the faux charity, Shelter, Generation Rent et al.
Please remind me who these organisations are supposed to be helping?

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Luke P

10:47 AM, 28th August 2019, About 5 years ago

I've come to the conclusion that almost all decision-making in this country is taken by those with the least understanding and it is because there is only time enough to become *either* and expert in a particular field/industry OR a decision-maker/politician. In order to reach positions of real power, you need to do certain things/be in the right places/'befriend' the right people, which is itself a full time, long-term job and therefore cannot wholesale focus on, nor be intimately acquainted with the everyday nuances within the industry you will ultimate take decisions on...!

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Luke P

11:00 AM, 28th August 2019, About 5 years ago

Hands up who thinks 'they' are building the case for rent controls...?

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David Lawrenson

14:48 PM, 28th August 2019, About 5 years ago

I'm not surprised by this action by a lovely "corporate landlord" in Manchester. I think the veil is dropping now as regards these big players being such "white knights".

George Hammond, a journalist for the FT, a couple on months ago wrote a great piece about the reality of the corporate landlords. It's a shame that the likes of Ann Ashton in The Times are still too suckered in by the corporate canapés to do some proper research on the big "build to renters".

Yes, who'd have thought that rents would rise following the fees ban? Actually, not only will rents rise, but in due course we will see an impact on the more "marginal tenants" and a hit on tenants with pets (due to limit to 5 weeks' deposit) plus on people who need guarantors. (If I have to reference check a guarantor as well as a tenant, but cannot charge for the extra time involved, I'm less likely to accept a guarantor too).

The tenant fees ban and limits to deposit is a posh tenants charter.
https://www.lettingfocus.com/blogs/2019/05/tenant-fees-ban/
....though the greed of some letting agents in gouging tenants for fees did, in part, lead to this typical overreaction from govt.
David Lawrenson
http://www.LettingFocus.com
Private Rented Sector Advice

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Arnie Newington

8:13 AM, 31st August 2019, About 5 years ago

The evidence of the ban on letting agent fees from Scotland was that rents would rise.

Shelter knew this and pushed ahead anyway.

Shelter are now arguing for rent control in Scotland so it doesn’t take a genius to work out what will happen next.

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