The number of estate agents seeing a rise in rents is at its highest level for almost a year, raising concerns about tenant affordability.
More than a quarter (27 per cent) of agents saw rent costs rise for tenants in May – the highest level since July 2016, when the figure was 28 per cent, according to the Association of Residential Letting Agents (Arla).
For the second month in a row, just 2.8 per cent of tenants successfully negotiated a rent reduction – down from 3.6 per cent in March.
The news comes as rising inflation and slower wage growth put pressure on consumers’ spending power.
Arla Propertymark chief executive David Cox said: “Private rents rose by 1.8 per cent in the 12 months to May 20173, and the last thing tenants need is for them to get even higher.
“With the new government confirming a Tenants’ Fee Bill in last week’s Queen’s Speech, we can expect them to rise by up to £103 a year, hitting loyal tenants looking for long-term agreements hardest. This is on top of any natural organic rent growth as well.
“The only thing which could offset this would be to significantly increase rental stock, but until this happens and supply and demand meet in the middle, rents will only become more and more unaffordable.”
The supply of rental stock climbed by 11 per cent year on year, meaning letting agents were managing 189 properties on average per branch in May.
Meanwhile, the number of landlords selling up declined, with agents reporting three sales per branch – down from four the previous month.
The figures come from an online survey of 247 Arla member branches between 1 to 14 June 2017, carried out by Opinium Research.
Paul Clifford, IFA at Eastbourne-based Clifford Osborne, commented: “There are just not enough quality houses to rent; and on the houses that are available, the rent seems exorbitant and not in line with people’s earnings.
“Tenants are in a bit of a vicious cycle at the moment. Rents are increasing, utilities and services are increasing but wages are not, so they are paying more of their income in rent. It means it will take even longer for them to save for a deposit.
“The pressure is on for landlords now with all the different fees. The costs of estate agent fees are ultimately passed on to higher rents, which is not good for the consumer.”