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Housing Body Claims Letting Fee Ban Due to Trigger Rent Hikes

A leading property industry body has claimed that the letting fees ban announced in last month's Autumn Statement will trigger further rent increases for tenants throughout next year.

A leading property industry body has claimed that the letting fees ban announced in last month's Autumn Statement will trigger further rent increases for tenants throughout next year.

The latest Association of Residential Letting Agents (ARLA) report shows that 18% or 1 in 5 agents experienced rent rises across the UK in October – a 6% decline from September, when 24% of agents witnessed rent hikes.


In terms of the supply of rental property, the report shows the average number of rental properties managed per branch in October stood at 180 – a slight decline from the 193 properties managed per branch in September.


Demand from prospective tenants also reduced slightly in October, with 34 prospective tenants registered per letting agent branch, compared to 40 in September - the highest number recorded in 2016.


In the North East, the number of registered prospective tenants per branch stood well-above average at 45; whilst high demand was also found in the East of England, where 42 prospective tenants were registered per branch, followed by the West Midlands, where the proportion stood at 36.


The number of landlords selling their buy-to-let properties has not changed since April, remaining at 3 landlords per branch in October; whilst the average void period between tenancies across the UK was just three weeks.


Although figures suggest activity in the rental market is easing, ARLA has claimed that chancellor Philip Hammond's strike against letting fees, announced in last week’s Autumn Statement, is likely to trigger significant rent increases over the year.


Commenting on the report, ARLA’s Managing Director, David Cox said:


“Just when rents were starting to stabilise, the Chancellor has thrown the biggest curve ball, meaning that rents will unpreventably rise when the tax changes and letting fees ban come into effect.


“In terms of supply and demand, this month’s findings reflect seasonal expectations and show the market is slowing in the final quarter. With fewer properties available to rent and a drop in the number of prospective tenants registering interest, tenants tend to stay in their current properties until the New Year arrives.”


Last month, figures from the Council of Mortgage Lenders revealed that demand for home ownership is also falling amongst the UK's population, with more people electing to rent property rather than purchase.

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