A government ban on tenancy fees set to come into play in seven days will more than likely make rents rise for tenants, according to a thinktank.
Letting agents have already signalled that some landlords have been putting up their rent prices since March in preparation for the new tenancy fee changes set to come into play next week. It is thought that some landlords have put up their rents by as much as 15 per cent to compensate for the changes.
Landlords will be out of pocket when the tenancy fee change comes in, so it is only natural that they would have to pass that cost on in order to not feel any difference – unfortunately, however, it is the renters who will feel this increase.
The irony is that the new ban was apparently brought in to protect tenants from having to pay extra fees on top of their rent when they started leasing a property. Due to the changes, however, renters are now having to pay more, as landlords are simply increasing rents to cover the money that would have been generated by being able to charge additional fees.
Ultimately it is the tenants that are being made to pay – the very people the government have set out to ‘protect’ against landlords.
Despite the depressing news that rents are set to rise, however, there has been a little bit of good news come from the renting sector.
Last month we warned that due to changes in tax that landlords have to pay, many landlords were leaving the sector and as a consequence were selling their properties. This, it was feared, would lead to a shortage of rental properties which would mean homes were more in demand than ever and rents would rise in line with this.
This fear has yet to become reality, however, as figures show more rental properties have come to the market this year than at the same point last year.
Can we say that we told you so?
Government involvement will never result in prices coming down. It doesn't matter whether it is the lending industry or it is the property market. More Government equals higher prices.