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Rent increases reported at lowest level of the year

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  • 23/11/2015
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Rent increases reported at lowest level of the year
Some 25% of tenants saw rent hikes in October, the lowest figure of the year, according to the Association of Residential Letting Agents (ARLA).

Its Private Rental Sector report stated the number of letting agents reporting increases had dropped from 32% in September.

The demand for rental properties dropped nationwide in October, with ARLA’s agents registering an average of 33 new tenants per branch, also the lowest figure of the year.

London was an exception with an 8% increase in prospective tenants registered per letting agent branch.

David Cox, managing director, ARLA, said: “Although it is typical that demand dropped at this time of year, as there is a seasonal lull in the run up to Christmas, we expect it to pick up again in January.”

He said that while ARLA hoped to see the number of tenants experiencing rent hikes remained low with supply and demand levelling out, he argued that ‘a lot is resting on the economic and political agenda.’

“We are still waiting for new houses, promised by the Prime Minister to be built. Whilst this will take pressure off the rental prices as supply rises, the changes to landlord tax proposed under the Finance Bill is likely to discourage new landlords from entering the market.”

Cox said it had been a ‘waiting game’ all year to see if Mark Carney, governor of the Bank of England, would raise interest rates in the new year, as this will play a big part in determining whether renters looking to buy a home will be able to afford to.

He added that when interest rates do rise, the goal of homeownership will be pushed further out of reach for many and put further pressure on the private rental sector.

Supply in available properties has declined nationwide, from 182 properties on average per branch in September, to 173 in October, a drop of 5%.

Only in the East of England and the South West did agents manage more properties last month than in September, with an increase of 8%, up to 199 from 184 available properties.

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