Almost a third (31 per cent) of letting agents saw landlords raise their rents in July amid ongoing pressure on the buy-to-let (BTL) sector.
The figure was the same as the previous month and up from 27 per cent in May, according to ARLA Propertymark’s July Private Rented Sector (PRS) Report, which is based on a survey of 240 member branches.
In July 2016, 28 per cent of agents saw rents increase.
There was a marginal rise in the number of properties managed per member branch from 190 in June to 192 in July - the highest figure since January.
But there was also an increase in demand from an average of 61 to 70 prospective tenants per branch.
The news comes as the BTL sector continues to face pressure from the government’s tax changes, including a 3 per cent stamp duty hike on additional properties and the phasing out of tax relief for landlords paying higher rates of income tax.
David Cox, ARLA Propertymark chief executive, said: “Landlords really are stuck between a rock and a hard place.
“All the tax increases they’ve incurred over the last 18 months have meant they either need to sell their properties and exit the market, or increase rent payments to plug the deficit.
“Neither of these outcomes benefit tenants; if they exit the market, supply is even more strained and matched with growing demand, rent prices will increase anyway.”
The government has faced calls to row back on some of the changes to the BTL sector as pressure on landlords continues to mount.
But Alex Reynolds, IFA at London-based Advies Private Clients, said the political climate meant a BTL U-turn was an unrealistic scenario.
He commented: “I think the changes made to the stamp duty and tax relief have probably been too far, and they have certainly stopped transactions dead in their tracks for a lot of people.
“It is a problem for existing buy-to-let owners worrying about their tax position going forward and a concern for people planning their retirement based on profits and income from properties they own.
“It would not surprise me if they made some tweaks, but it is a fiendishly complicated system, and they have their view of a fairer system. A lot of people were buying properties to rent out, which was pushing first-time buyers further away from buying a property.
“At the moment, looking at the electorate, a large number of younger people are disaffected with political parties and leaning to a Labour vote. Giving younger people the ability to buy a property would probably be a vote winner.”
He added that the government may alter the system slightly to help older people looking to downsize and who are being deterred by the stamp duty hike, but major reforms were unlikely.
simon.allin@ft.com
