A Upad survey has revealed a firming up of landlords' intentions following confirmation in Chancellor Phillip Hammond's first (and last!) Autumn Statement that the Government will pursue the banning of letting agent fees "as soon as possible."
Upad previously surveyed landlords in late July / early August of 2016 on the same issue. One of the key findings of that survey was that a surprisingly low 22% of private landlords stated they would be putting up the rent should letting fees be banned, against 40% who said they wouldn't increase the rent and 38% who said they didn't know what they'd do, while 13% of private landlords admitted they thought all fees were unfair.
Perhaps most alarmingly, at the time we conducted the initial survey 45% of landlords were unaware of the Renter's Rights Bill and that tenant fees were potentially going to be banned.
Since Mr Hammond confirmed plans in the Autumn Statement, there has been a significant shift in landlords' attitudes on the issue of whether they will raise the rent in response.
Almost double the number of landlords (44%) now say they will raise the rent when letting fees are banned. This number has primarily been increased by landlords who were previously in the "Don't Know" category, highlighting that the last three months in addition to the Autumn Statement has helped to firm up and confirm their intentions. Private landlords may have made this decision based on a number of factors, including considering how the ban may influence their profit, especially if they use a high street letting agent and have been informed all tenant fees will be automatically passed onto themselves.
Following clarification of the law relating to the ban on tenant fees in Scotland in 2012, Your Move reported rents raising by 3%, or £312 per year, though a UK Government Committee stated there was no strong evidence to suggest this was solely driven by the ban on fees.
Our survey suggests that a large proportion of tenants should prepare for a rent increase in the near future, though it will depend on a number of variables, including the fees tenants currently pay.
Upad's belief is that a rent increase for most tenants is inevitable. You can read Upad CEO and portfolio landlord James Davis' response to the Autumn Statement here.
Are you a landlord worried that the high fees your tenants currently pay is going to make it impossible to raise the rent without them looking elsewhere? If you are currently trying to find a tenant, or are going to be advertising your property for rent in the near future, why not give Upad a try? We'll save you money, find you a tenant quicker, and the savings could even help you avoid increasing the rent to make up for any shortfall should you find yourself having to cover the soon to be banned fees yourself.
Register here to become a Upad landlord and enjoy a fresh approach to lettings.