A new survey from online letting agent Upad.co.uk has revealed concerning news for tenants, in light of the banning of letting agent fees announced in last week’s Autumn Statement.
Results from the investigation show that 40% of landlords plan on upping their rents, should they to be left to pick up the cost of these tenant fees.
Just one-third of those questioned said that they would definitely not increase rents. This means that 2.6 million renters could face rent increases as a result of the changes.
In addition, 75% of investors with landlord insurance have to intention to sell their buy-to-lets, despite the numerous tax changes inflicted on them during the past 12 months.
James Davis, CEO and founder of Upad.co.uk, noted: ‘Once again a measure that has been brought in to punish landlords has come home to roost. Due to the chronic housing shortage we face in the UK, the lettings market is under immense pressure and this attempt to help potential first time buyers has actually done more harm than good. Instead of punishing landlords, we need to find ways to increase the supply of quality and affordable rental property to help house the millions of people who need it. Frustratingly for everyone involved, this research suggests that landlords will be left with no choice but to further increase rent.’
‘This recent blow is just one of many that have hit landlords hard in 2016. The neglected lettings industry has a bulging balloon of tenants who are chasing too few rental properties and by continually kicking landlords, this situation is not going to improve,’ he continued.
The disparity between supply and demand is already pushing rents up by up to 5% per year. Salaries are only expected to increase by 1% next year. It is feared that many tenants will fall behind on their rental payments during the coming months.
Concluding, Mr Davis said: ‘Landlords still face costs when setting up a tenancy but we estimate these to be roughly about half of the average fees reported this week by typical lettings agents. So whilst there will still be a cost to bear, the impact hopefully won’t be quite as hard-hitting for landlords and their tenants.’