Tenants feel the pinch as rent costs accelerate to record high

PRS REPORT: Rent prices rose to a new record high for the third consecutive month in July with two thrids of agents seeing landlords hike rents. Demand from prospective renters also rose compared to the previous month, whereas the average number of managed properties dropped.

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Rent prices

  • The number of tenants experiencing rent rises increased to the highest figure on record in July, with two thirds (63 per cent) of agents witnessing landlords increasing them. This is a 15 per cent increase from June which was a previous record high.
  • Year-on-year, the number of tenants facing rent increases is up from 31 per cent in July 2018.

Supply of rental stock and demand from tenants

  • Letting agents had an average of 184 properties under management per member branch in July, a decrease from 199 in June.
  • Demand also increased in July, with the number of prospective tenants registered on average per branch rising to 733, compared to 70 in June.
  • Year on year, demand has fallen, from 79 house hunters registered per branch in July 2018.

Landlords selling their buy-to-let

  • In July, the number of landlords exiting the market remained at four per branch. This remains the same from July 2018.
Following the Tenant Fees Act coming into force in June, rents have continued to rise, which we believed would happen. The fees agents have been banned from charging are still being paid for by tenants, however it’s now through their rent, rather than upfront costs. The fall in the number of properties available further increases competition in the market, which only pushes rents up or forces landlords to exit the market entirely. As the sector faces increased levels of legislation, it’s evident this is putting even more pressure on the industry.
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David Cox Chief Executive | ARLA Propertymark

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