There is increasing evidence of the so-called unintended consequences of the tenant fee ban according to a major regional lettings agency.
Linley & Simpson, which has 16 branches across north and west Yorkshire, says the first three months of the legislation have already triggered an average rent increase of between four and five per cent on new lets agreed.
“The fee ban is in its relative infancy but already our data, which mirrors research undertaken by the likes of Belvoir, exposes the shortcomings in the government’s thinking” says chief executive Will Linley.
“What we are now seeing is a picture rapidly emerging across England that, for the first time, evidences the scale and pace of the impact on tenants’ pockets. In my 30 years working in the sector, I would say this uplift is unprecedented.
“Agents like us warned the government long and hard about the unintended consequences of its approach, yet our voice and our suggested alternatives were ignored. Our fears are now being borne out with tenants facing higher rents almost overnight.
“And with rising demand and a shortage of new buy to let activity – another far-reaching result of the ban – the upward trend in monthly rents is only going to accelerate.”
The agency’s data shows that average rents in its portfolio of more than 8,000 properties have risen by 5.6 per cent year-on-year, but that the uplift on new lets agreed since the start of the fee ban in June 1 has been between four and five per cent.
The Linley & Simpson research also put into perspective the number of tenants who delayed their move until the ban came into force.
The amount of move-ins during the first three months of the ban almost matched the total for the previous five months of 2019.
Some branches – such as the in-demand Leeds city centre – reported record numbers of move-ins during June itself, more than double its monthly average.
He adds: “The anti-landlord tax regime being pursued by government is supressing supply and, in the longer term, the problem will deepen as some landlords choose to off-load their portfolio. Supply and demand is increasingly out of kilter and we are striving hard to redress this imbalance.
“There’s added pressure from landlords to increase returns in the face of rising tax liabilities and higher agency costs following the ban. These are complex dynamics which regrettably, turning to the future, look set to deliver a poor deal for tenants.”
Original Source: Letting Agent Today.
Original Author: Graham Norwood.