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Rent hike expected in 2017: ARLA

Following the Autumn Statement announcement that letting agents will be banned from charging fees to tenants, 80 per cent of agents expect rent hikes next year.

A report from the Association of Rental Letting Agents found that in November, the number of tenants experiencing rent increases decreased to 16 per cent, a fall from 18 per cent in October.

However, it also found that following the ban on letting agent fees for tenants eight in ten agents expect to see rent hikes in 2017.

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Demand from prospective tenants also fell in November, according to the report, as the rental market cools ahead of Christmas; 32 prospective tenants were registered per letting agent branch, compared to 34 in October.

However, more than half (53 per cent) of agents expect to see a rise in demand next year.

In November, the number of rental properties managed per branch was 185, an increase from 180 in October but considerably lower than the level seen in September, when there were 193 properties managed per branch.

Following the increase in taxes for landlords, including stamp duty and capital gains tax, a third (63 per cent) of agents expect the supply of rental accommodation to decrease in 2017.

ARLA managing director David Cox says: “The number of rent hikes reported by letting agents continued to decrease in November, and it’s a shame the ban on letting agent fees will have the opposite impact on rent prices when the measure comes into force.

“The BTL market is becoming less attractive for investors as the ban on fees, combined with the scrapping of mortgage interest relief and the stamp duty increase on second homes push costs up for landlords. So unfortunately, regardless of the uplift we saw in supply this month, we expect to see the number of properties available to rent fall next year.”

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