Early evidence that landlords will increase rents to cover their increased costs….
The Tenants Fee Ban came into effect on the 1st June 2019 which shifts the cost of referencing, check out fees and other rental costs wholly on to landlords. As expected, and as letting agents and landlords prepare for the changes ahead of the ban coming into effect, rental values for new tenancies have begun to rise at a rate not seen in the market for over two years. The annualised picture shows rental values having increased at a higher rate than was seen in 2018 – rising by 3.3% in the last 12 months.
The Home Let Rental Index, possibly the most comprehensive and up-to-date data on rental values in the UK, is showing a move away from the normal fluctuations in the private rental market, with rents for new tenancies now rising at a rate above inflation – one that has not been recorded since October 2016.
Here on the island, we are also seeing landlords starting to increase rents to cope with the impact of higher costs, the restrictions on mortgage interest relief and other increasing costs. This trend seems set to continue and to gain pace in the second half of 2019.
Commenting on the changes, Trigg & Co Managing Director Keith Trigg said:
“Unfortunately, the effect of this Government action will be to increase costs for long standing tenants who don’t move on every 6-12 months. While those short term renters will avoid referencing fees and other costs, those costs do not magically disappear, and the resulting increased rents will be paid by long standing tenants who stay long term. Landlords are also getting more choosy about who they will and will not accept as tenants, as they don’t want to waste money on referencing tenants who may not pass the referencing checks.
They are also now worried about the Government’s latest plans to abolish the right of landlords to serve a s21 notice and recover possession of their property without needing to prove nuisance, arrears or other grounds. This will further push up rents as landlords react to what they will see as increased risk and potential costs”.
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