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Has The Tenant Fee Ban Encouraged Recent Rent Hikes?

3rd January 2020

There have been several reports over the past month suggesting that landlords have begun to increase their rents by as much as 22% since May. These same reports say that the hikes are due to the recent Tenant Fee Ban, but could there be other factors also in play?

Since the introduction of the Tenant Fee Ban earlier this summer, landlords all over the UK have been thrown into disarray due to a huge drop in income – the Ban has meant that landlords can no longer charge new tenants any upfront fees for services such as inventories and administrative costs, and this has led to a massive fall in income of up to 30% in some cases.

The fallout became apparent in June, where reports show a significant increase in rents following the Ban – a pattern which we also saw in Scotland when their Ban came into force earlier in the year.

Seeing the results from Scotland, Government made efforts to warn landlords not to increase rents, but look at other ways to increase income. But with the added pressure of changes to Section 21, and changes in demand for housing, the industry as a whole is being forced to raise rents in order to evolve and survive the upheaval within the property sector.

Other factors in rising rents

All of the changes in the industry, a combination of the Fees Ban, Section 21, and general cost increases, have come together to put pressure onto landlords, and we have seen a decrease in the number of landlords investing in new properties. Many letting agents have reported a drop in the number of managed properties on their books, and it’s not yet certain whether this is due to landlords saving costs by trying to manage the properties themselves, or whether they are simply ‘cutting their losses’ and selling up.

If there are, as predicted, less rental properties on the market over the coming years, the increase in demand for them will also mean that landlords and agents can secure those higher rents, because there is likely to be much more competition, especially in those more sought after areas, where people are not able to afford to buy on a mortgage.


Despite all the odds, though, it does seem that the majority of landlords and agents are optimistic about the future of the lettings industry.

The property sector, especially lettings, has always had the ability to ‘roll with the punches’, and adapt – perhaps because changes are so frequent that we have all come to expect it and learned to evolve more readily than other industries.

There will always be a need for good housing in the UK, and it looks like for the foreseeable future, there will be a rising demand for rental properties, and as long as landlords and agents can continue to work together to improve the property market and keep up the excellent standards that tenants have come to expect, then despite rising rents, they will seek out properties knowing that they are still getting value for money.

The Future of Lettings

There is an upside to all of these changes – because those landlords who stay the course will be the ones who can offer a higher standard of accommodation, can keep up with legislation in order to keep tenants safe and the property in good repair. In short, it may be, in the long term, a way to shake up the industry in order to bring it up to the standard we’ve all come to expect.

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