Rent prices have reached their highest point on record, following the Tenant Fees Act, which came into force on 1st June 2019, according to the recent Private Rented Sector Report from ARLA Propertymark.
In April, tenants saw rent prices rise, with 33 per cent of estate agents witnessing landlords increasing them, up from 30 per cent in March. This is a marked increase, compared to 24 per cent witnessing increases in April 2017 and 26 per cent in April last year, the report showed.
Moreover, the number of tenants successfully negotiating rent-price reductions fell from 2.9 per cent in March to 1.9 per cent in April.
Supply drops as demand rises
Examining the supply of rental stock and demand from tenants, the report found that the number of properties available to rent saw a slight drop, to 201 per member branch in May, down from 202 in April. However, demand from prospective tenants increased to 69 on average per branch last month, compared to 64 renters in April.
Year-on-year, this meant that demand rose by 15 per cent, having risen from 60 individuals searching for rental accommodation registered per branch in May 2018, according to the recent report.
Slow-down in buy-to-let market
Letting agents saw a slight decrease in landlords selling their buy-to-let properties in May. The number of landlords exiting the property market also fell marginally, from five per branch in April to four last month.
David Cox, chief executive at ARLA Propertymark, commented: “As predicted, last month’s findings have shown an increase in rent prices in advance of the Tenant Fees Act coming into force. This rise in the number of tenants experiencing rent hikes is the highest we’ve ever had recorded and rents will likely continue to rise, as they must now cover the agent’s legitimate costs for setting up a tenancy.”
Mr Cox concluded that competition for properties will be increasing, as the supply of properties available to rent falls, but the demand from prospective tenants grows. This ultimately pushes up rent prices on well-managed properties and leaves tenants feeling the pinch, according to Mr Cox.