Rental market data covering before and after the fees ban shows small reductions in yields which, it is claimed, have been kept to a minimum by landlords putting rents up.
Many landlords and industry associations predicted last year that the tenant fees ban might be the ‘final nail in the coffin’ for the private rental market because it would push up costs and reduce yields.
Landlords must now pay for referencing and many other moving in, property management and check-out costs that used to be charged to tenants but that, in England since June 1st and in Wales since September 1st, must now be paid for by the landlord.
Despite this, data published today by lettings platform Howsy reveals that these extra expenses for landlords have only marginally dented yields in England while in some areas they have increased.
The average yield for a buy-to-let property prior to the tenant fees ban was 4.08%, down from 4.21%, with only the North East seeing a significant reduction of 0.25%.
“The resilient nature and diverse landscape of the UK rental sector means there are plenty of pockets that have actually seen yields improve and while this growth may only be marginal at present, it is a very positive sign given the short time scale,” says Howsy founder Calum Brennan.
“As with all investments, the buy-to-let sector is all about knowing the market and picking the right options and if you do, bricks and mortar remain a very sound one.” The fees ban has also failed to cut the costs of renting for tenants; while the legislation was said to save tenants on average £70 a year in fees across the life of a tenancy and £300 each time they moved, letting agents’ association ARLA Propertymark recently revealed that 64% of tenants experienced rent hikes during the traditional busy month of August, when tenants are most likely to move home.