80% of letting agents expect rent prices to increase next year, according to the findings of the Association of Residential Letting Agents’ (ARLA) November Private Rental Sector (PRS) report.
In November, the number of tenants experiencing rent increases continued to decrease, at 16%, a decrease from 18% in October.
However, following the Chancellor’s announcement to ban letting agent fees for tenants during his Autumn Statement, 80% of agents expect to see rent hikes in 2017.
Demand from prospective tenants fell again in November, 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% 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. However, this is considerably lower than the level seen in September, when there were 193 properties managed per branch.
Following the increase in taxes for landlords, including stamp duty and capital gains tax, 63% of agents expect the supply of rental accommodation to decrease in 2017.
David Cox, ARLA managing director, said: “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.
“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.”
