Landlords increase rent in response to tenant fees ban

Since the Tenants Fees Act was introduced, many landlords have increased the price of rent to recoup their losses.

The new Tenants Fees Act came into effect on 1 June 2019, preventing landlords from charging up-front admin fees and end of tenancy fees.

Landlords found to be breaching the new law could be fined £5,000 and receive civil penalties of up to £30,000.

The new law is effective at protecting tenants from being charged excessive fees, saving renters around £192 million a year. But, consequently, the new law adds extra expenses for landlord and letting agents.

In response to the ban some landlords and letting agents have increased rent in order to recoup some of their losses.

In fact, the Association of Residential Lettings Agents (ARLA) reported that in June the number of tenants that experienced rent rises increased to the highest figure on record.

Some 55% of agents found that landlords increased the price of rent in June. According to ARLA’s figures, this was a 22% rise from May, which was also a previous record high.

David Cox, ARLA Chief Executive said: “Unsurprisingly, rent costs hit a record high in June as tenants suffered the impact of the tenant fee ban. Ever since the Government proposed the ban, we warned that tenants would continue to pay the same amount, but the cost would be passed onto tenants through increased rents, rather than upfront costs,’ said David Cox, ARLA chief executive.

“In addition to the repercussions of the Tenant Fees Act, the proposed abolition of Section 21, coupled with the Mayor of London’s recent call for rent controls, will only cause the sector to shrink further. In turn this will increase pressure on the sector because it will discourage new landlords from investing in the market, causing rents to rise for tenants as less rental accommodation is available.”