Tenant demand and rents go up as fees are dropped

According to the latest figures from Rightmove, demand from tenants looking for a new place increased 7% between May and June. This is an uplift seven times bigger than the previous four-year average of just 1% at this time of year. The online home finding specialist thinks this is a direct response to the Tenant Fees Ban that came into force on 1 June and we’re sure they’re right. According to the report:

• In London, there was a 13% increase in demand from May to June, compared to a four-year average of 4%
• Agents are reporting an increase in enquiries from tenants looking to move now that the majority of tenant fees have been removed

Nationally (excluding London) asking rents are at a record high of £817 per month, and running at 2.7% up on a year ago, as the cost of renting continues to rise year-on-year. According to new PRS data from ARLA, the number of tenants experiencing rent rises increased to the highest figure on record in July. A whopping 63% of agents witnessed at least some of their landlord clients increasing rents during July. And ARLA says this is a 15% increase from June -which already showed a record hike. To put this in perspective, back in July 2018 the proportion of agents seeing rent rises was just 31%. So as soon as the Tenant Fees Act came into force in June, rents started to rise faster and across the board. No surprises here for anyone working in the PRS. As ARLA spokesman David Smith said this week, the fees agents have been banned from charging are still being paid for by tenants - but it’s now through their rent, rather than in upfront costs. If the government's aim here was really to help tenants, its backfired already.