A new study from ARLA (the Association of Residential Letting Agents) reveals that over than half (52%) of letting agents they questioned forecast that rental prices will increase in 2017.
The forecast is based on:
- the demand from renters increasing in 2017, but the number of properties available to let dropping, creating an imbalance between supply and demand;
- from April 2017, the restriction on the amount of mortgage interest landlords can offset against tax on their property investments begins, with agents believing landlords will have little alternative but to increase rents;
- finally, under plans announced by the chancellor in his Autumn Statement, letting agents in England will not be able to charge fees to tenants, with the costs expected to be passed on to landlords. This again, could increase rents.
In a news story in LandlordToday, David Cox the Managing Director at ARLA was quoted as saying:
“The government continues to lash out against the private rented sector (PRS) 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.”
The latest figures available as to the size of the PRS show that 17% of British households (nearly 4 million households, or 10 million people) live in the private rented sector, compared to 10% in 1999.