The Association of Residential Letting Agent’s (ARLA) latest Private Rented Sector (PRS) Report, which draws on data gathered by ARLA from 363 of its member agents between 2nd and 16th July 2015, has reported that between May and June, more than one-third (36%) of member letting agents reported rent rises. This is the highest number since ARLA started this service.
The highest concentration of rent increases occurred in the East Midlands and the lowest rate of increase was in Wales.
The report says that most agents feel that rent increases will continue over the next five years, with around 80% of agents of this view, that there was a slight reduction in the supply of rentals in June this year, and that they were getting more enquiries for short-term lets. The average void period reported was three weeks.
ARLA’s managing director, David Cox, thought that the rent increases might have been brought about due to the measures introduced in the Summer Budget where landlords will see reduced tax relief on mortgage interest, but that might seem premature given that these measure will not commence until April 2017, and then will be phased in gradually over 4 years.
The reasons behind the hike seem unclear, but the supply-demand imbalance and perhaps the tax reductions, coupled with increasing burdens on landlords and agents brought about by more rules and regulations being recently introduced, or due to be introduced from October this year, could all have led to conclusions by many landlords and agents that more returns are needed to cover their additional costs.
— LandlordZONE® (@LandlordZONE) August 27, 2015