The vast majority of letting agents expect to see private rented sector prices rising across 2017, according to new data, even though there has been a drop in the number of landlords raising their prices towards the end of this year.
According to the most recent survey from the Association of Residential Letting Agents (ARLA), only around 16 per cent of tenants in the private sector experienced a rise in their rental price in November this year. This was a fall from the 18 per cent that was evidenced in October.
However, ARLA said these figures can largely be attributed to the fact that it's the end of the year, and fewer landlords ever increase prices at this point in any year. It said that the majority do expect, however, this downward trend to change in 2017, and for price rises to return to normal levels.
This will, in part, be fuelled by demand, but policy changes from the government will also come into play, making it more expensive to rent a home for millions of tenants across the nation.
"The number of rent hikes reported by letting agents continued to decrease in November, and it’s a shame the ban on letting agent fees will have the opposite impact on rent prices when the measure comes into force," said David Cox, ARLA managing director.
He said there is set to be an ongoing issue with supply as policy dents confidence as well. "The buy to let market is becoming less attractive for investors as the ban on fees, combined with the scrapping of mortgage interest relief and the stamp duty increase on second homes push costs up for landlords. So unfortunately, regardless of the uplift we saw in supply this month, we expect to see the number of properties available to rent fall next year," said Mr Cox.
Overall, some eight in ten of the letting agents surveyed said that they would expect to see rental price rises returning to early 2016 levels across the course of 2016, so there could well be hikes of between three to five per cent in the 12 months ahead.