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Major letting agency warns: tax changes will push up rents

Belvoir says new figures from across its network of agents shows that the government is wrong to claim that renting is expensive across the entire country - but it’s warning that rent rises are on the way thanks to a raft of what it calls “anti-landlord policies.”

Belvoir's rental index for the final quarter of last year, compiled by leading buy to let expert Kate Faulkner, confirms that rents are broadly rising in line with earnings - with the notable exception of London.  

“Belvoir has over 300 offices nationwide and data for those offices that have traded consistently over the last eight years in England, Wales and Scotland, indicates rental increases of just over 1.25 per cent, year on year, from £734 in Q4 2015 to £744 in Q4 2016” explains Dorian Gonsalves, Belvoir's Chief Operating Officer. 

He says the latest data reveals dramatic variations in regional performance, with rents ranging from £598 in the North East, up to £717 in the South West, and through to £975 in the South East and £1,478 per month in London.

“When comparing the Q4 2016 average rent to the 2015 annual average of £722, this shows a three per cent increase, which was exactly in line with our forecast at the end of 2015. These findings are at odds with claims made in the government's recent White Paper that renting is 'expensive' - clearly this is not an accurate reflection of the situation across the whole country” insists Gosalves.

However, Gosalves remains adamant - as Belvoir has warned for some time - that continuing government intervention in the private rental sector means rents are set to rise. 

“In December we predicted that rents are likely to rise by as much as 15 per cent in the next three years, although this will vary from region to region. Should rents rise in excess of earnings this will of course be detrimental to tenants – a situation that cannot be blamed on 'greedy landlords', but rather more on the government's misunderstanding of the dynamics of the private rental sector” he says.

He says almost half of Belvoir tenants are renting properties for between 13 and 18 months, and a similar percentage rent properties for 18 and 24 months. 

“Most of Belvoir's tenants actually choose to leave, and we have an extremely low number of evictions, so it is clear that tenants are already able to find security in the rental market, provided they seek professional help from an agent that is committed to matching good properties and landlords to tenants at a local level” Gonsalves adds.

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    I attended Gavin Barwell's housing white paper roadshow yesterday. When I asked him about this he said that George Osborne and he both agree that the BTL housing bubble needed to be burst and that is why he had introduced the 3% SDLT surcharge and would bring in (and monitor) the other penalties over the next 4 years. By then my microphone had moved on ... he seems not to appreciate that the 3% extra SDLT has already burst the bubble (CML says BTL mortgages down 40% but I don't remember my last BTL sale) and that the new policies will force rents up. It is up to us to lobby our MPs to quiz him about this. To retain our landlords we expect to increase rents by 10% pa to offset the penalties.

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    I it worthy to request explanation of "renting is expensive" are they referring to costs involved with entry and movement in the PRS - as we all know deposits account for over 50% of these "costs" - as proven rents have not increased in all regions and I agree the government or at least this housing minister have misunderstood the PRS!

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    GB did say that he felt it wrong that landlords can negotiate T&C with (and then select) their agent but that having done so, the tenant cannot. He feels that tenants are in a weak position here which is why he wants 'up front fees' to be negotiated with and paid by someone other than the tenant. I got the impression that he feels if a landlord, insurers and the agent want to carry out reference checks and professional independent inventories then that is their choice so they can pay for it. Clearly it is best practice to do these things but he seems to see no reason why the tenant should pay for optional best practice. In theory he has a point but there will be one hell of a mess if these best practice actions are dropped.

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