A new forecast has predicted that rents in England are set to rise by 15% in the next three years, albeit it with strong regional variation.
Agents estimate that rents are likely to increase at a greater pace than house prices, with landlords attempting to find ways of generating extra costs to cope with recent tax changes.
According to Belvoir, these rental rises are set to be driven by a shortage of homes available in the private rental sector.
The firm’s most recent rental index for the third quarter of 2016 found that 88% of its offices recorded an increased demand for rental accommodation. Furthermore, 86% of tenants-around six million households-had less than £8,838 needed for just a 5% deposit on the typical UK home.
Dorian Gonsalves, chief operating officer at Belvoir, said: ‘People from all walks of life, including students, migrant workers and professionals with families, are struggling to meet stringent lender affordability ratios. When someone is not in a position to buy, they obviously start looking for somewhere to rent.’
‘But unfortunately, Government policies seem to lack any direction, and have done nothing to benefit either landlords or tenants, so tenants could find it more difficult to find good quality suitable accommodation in 2017 and beyond,’ he continued.
Banning agent fees
On the subject of banning letting agent fees, Mr Gonsalves explained that the firm has taken advice from their Scottish offices, as these fees are already banned north of the border.
Gonsalves stated: ‘I predict that 2017 will be a year for agents to adapt and change, as the impact of the government’s recent anti-landlord policies take effect and the market readjusts. In addition, the Government’s failure to increase the availability of social housing for rent has resulted in a real shortage of good quality rental accommodation in the private rental sector.’
Concluding, Gonsalves urged the Government to reassess some of the policies affecting the private rental sector in order to the help drive up supply. This, he believes, ‘would then bring down rents and benefit millions of tenants, making for a healthier rental sector.’