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The Association of Residential Letting Agent (ARLA) has just published its latest Private Rented Sector Report and the results are interesting.
ARLA Report
The data has been gathered from 363 ARLA member letting agents in July this year and more than a third of those surveyed reported that property rents have risen in May and June.
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ARLA says this is the highest rise since it started collecting data from its members. The highest rent rises were in the East Midlands and the lowest in Wales.
The ARLA report indicates that 80% of letting agents think rents will continue to rise for the next five years. The report also says that there were fewer rental properties on the market during May and June; enquiries for short-term lets increased; and the average void period for rental properties was only three weeks.
What’s Causing the Hike?
It is difficult to say why rents have increased, but some experts think that the Chancellor’s budget announcements have had a big effect on landlords in the private rental sector. With the prospect of a reduction in the amount of tax relief, some landlords might be putting up the rent to cover their additional costs, even though the changes are not coming into effect until April next year.
There is also the age-old problem of supply and demand: there is still a big demand for rental property and in areas where demand outstrips supply rents are naturally going to increase.
Another issue that could be to blame, according to ARLA, is that landlords are dealing with an increasing burden of rules and regulations, which all eats into their working day. As a result, some landlords may be trying to increase their return on investment in order to cover their costs.
