Over half of UK letting agents expect rent rises in 2017 due to fewer new rental properties as a result of tax changes, stamp duty hikes and a ban on letting agents' fees for tenants.
Rent rises are likely in 2017 as fewer rental properties enter the market, according to forecasts from The Association of Residential Letting Agents (ARLA).
Over half - 52% - of letting agents predict rents to increase next year, partly as a result of the ban on letting agents' fees for tenants, which is due to take affect 'as soon as possible'.
Rental supply is expected to fall due to stamp duty hikes and tax changes introduced by the government in an attempt to cool buy-to-let investor activity and make it easier for first-time buyers to secure a property.
Landlords have been met with a 3% stamp duty increase on second homes, the scrapping of the wear and tear allowance, changes to mortgage tax relief (due to be phased in from April 2017), and a proposed ban on letting agents' fees for tenants.
The rise in costs for landlords will, inevitably, force some landlords to sell their buy-to-let properties. It will also be harder for potential landlords to secure funding from lenders next year.
With fewer rental properties coming onto the market, there will be fewer accommodation options for tenants and rents will likely increase.
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Mortgage Finance Gazette