News
Rents set to reach new heights in 2017
Tuesday 10th January 2017
New research suggests that property rents are on the rise for 2017 due to a number of contributing factors including insufficient supply, the introduction of new tax restrictions and the banning of letting agency fees.
According to ARLA (Association of Residential Letting Agents) they have forecast the number of properties coming on to the market will drop, adding to the widening supply/demand imbalance. In addition to the lack of supply, buy-to-let landlords have been hit with restrictions on how much of their mortgage interest they can offset against tax. The changes, which take effect from April, will leave some landlords with no option other than to increase rents in order to try and recapture loss of income.
And with the announcement from Chancellor Phillip Hammond set to ban all letting agent fees, this is the third factor to affect rising rents. Agents will be looking to pass these costs over to the landlord, who in turn will look to recoup them from the tenant. Ultimately the tenant will end up paying and potentially losing as they are forced to look at properties in cheaper areas.
This year is set to be a challenging one and many including David Cox, managing director of ARLA are critical of the new changes.
"The government continues to lash out against the private rented sector to cover its own failure to build the number of homes this country needs. Such policies will have a detrimental effect on the very people the government aims to help the most".
"As a result, we predict 2017 will be a raw year for renters. We now need stabilisation from the government before tenants are squeezed dry of every penny."