The Association of Residential Lettings’ Association (ARLA) in the UK has predicted an increase in rents in 2017. The ARLA has attributed this prediction to the reduced number of new rental homes coming to the market, increased stamp duty surcharge on additional properties and existing lower housing stock levels.
In addition to these, the ban on the lettings agent fees coupled with mortgage interest relief, is expected to place upward pressure on rents, ARLA said following a survey of the lettings agents. The demand for rented properties will surge in view of these developments across the UK, particularly in London where rents are already among the highest.
Owing to a rise in landlord taxes in 2016, some of them may be compelled to dispose some or all their buy-to-let (BTL) properties and exit the rental market. Some of the buyers of such properties may not necessarily let out them for rents. Consequently, the stock level of rented properties is expected to reduce in phases.
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Over half (52 per cent) of ARLA member agents expect rent prices to increase in 2017. Lower stock levels, combined with mortgage interest relief and the ban on letting agent fees will put upward pressure on rents