Some 70 per cent of letting agents expect taxes on the rental sector to rise further next year according to research from the Association of Residential Letting Agents.
On top of that almost three in five agents think rent prices will rise next year, compared to just 19 per cent who predict they will decrease, while almost two thirds expect the supply of rental stock to fall in 2018, while a majority think demand will continue to rise.
“It looks like rising rent costs are going to continue into the New Year as agents need to be moving into a zero per cent fee business model by October, which will push rents up as the costs are passed through landlords and onto tenants” says David Cox, chief executive of ARLA Propertymark.
“There is a lot of other regulation making its way through Parliament next year, which will more positively affect the rental market however – including regulation of the industry, housing courts and longer-term tenancies. While these policies will be developed rather than implemented, they should start to affect the market as agents adapt their businesses in anticipation” he adds.
Cox also says the sector needs to remember that the Minimum Energy Efficiency Standards coming into effect in the next year could see up to 300,000 properties being taken off the market because they don’t reach the minimum requirements. This will also – in turn – push rent costs up.
“Overall, the industry is going through a seismic change and the lettings market we know today will be radically altered over the next five years. This change will be painful for agents, but we firmly believe that the industry will come out of the other end stronger, more professional and with a robust reputation among consumers” concludes Cox.