Private Rented Sector Report: May 2019

RENT PRICES RISE TO HIGHEST ON RECORD FOLLOWING TENANT FEES ACT

Key Findings

  • The tenant fee ban has already led to a dramatic increase in rent prices
  • While the supply of rental properties decreased, demand from prospective renters rose

 

Rent prices

  • The number of tenants experiencing rent rises increased in May, with 45 per cent of agents witnessing landlords increasing them, up from 33 per cent in April.
  • Year-on-year, this figure is up from 27 per cent in May 2017, and 28 per cent in May 2018 [Figure 1].
  • In May, the number of tenants successfully negotiating rent reductions fell from 1.9 per cent in March to 1.6 per cent in May. This is the lowest figure seen since October 2015 when it stood at 1.7 per cent.

Rent Hikes

Figure 1: Average number of tenants experiencing rent hikes year-on-year

Supply of rental stock and demand from tenants

  • The number of properties available to rent dropped marginally to 201 per member branch in May, from 202 in April.
  • Demand from prospective tenants increased in May, with the number of house hunters registered per branch rising to 69 on average3, compared to 64 in April.
  • Year on year, demand is up 15 percentage points, from 60 house hunters registered per branch in May 2018.

Landlords selling their buy-to-let

  • In May, letting agents saw a slight decrease in the number of landlords selling their buy-to-let (BTL) properties.
  • The number of landlords exiting the market fell from five per branch in April, to four in May.

David Cox

David Cox

Chief Executive

“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.

“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.”