Substantial majority of letting agents expect rent rises in 2017

Some 80 per cent of letting agents say they expect rents to rise next year.

In the latest market survey by the Association of Residential Letting Agents, four out of five agents say that following the Autumn Statement - in which Chancellor Phillip Hammond said he was to ban agents’ fees levied on tenants - they expect rents to increase in the next 12 months.

However, demand from prospective tenants fell again in November - when the survey of ARLA members was taken - 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, 53 per cent of agents expect to see a rise in demand next year.

In November, the number of rental properties managed per branch was 185, an increase from 180 in October. This is considerably lower than the level seen in September, when there were 193 properties managed per branch.

Following a year of increases in taxes for landlords, including stamp duty and capital gains tax, some 36 per cent of agents expect the supply of rental accommodation to decrease in 2017.

“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” says David Cox, ARLA’s managing director.

“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” he adds.