Latest: Has the tenant fees ban been the disaster for landlords it was predicted to be?

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Rental market data covering before and after the fees ban shows small reductions in yields which, it is claimed, have been kept to a minimum by landlords putting rents up.

Many
landlords and industry associations predicted last year that the tenant fees
ban might be the ‘final nail in the coffin’ for the private rental market
because it would push up costs and reduce yields.

Landlords
must now pay for referencing and many other moving in, property management and
check-out costs that used to be charged to tenants but that, in England since
June 1^st and in Wales since September 1^st, must now be
paid for by the landlord.

Despite
this, data published today by lettings platform Howsy reveals that these extra expenses
for landlords have only marginally dented yields in England while in some areas
they have increased.

The
average yield for a buy-to-let property prior to the tenant fees ban was 4.08%,
down from 4.21%, with only the North East seeing a significant reduction of
0.25%.

“The resilient nature and
diverse landscape of the UK rental sector means there are plenty of pockets
that have actually seen yields improve and while this growth may only be
marginal at present, it is a very positive sign given the short time scale,”
says Howsy founder Calum Brennan.

“As with all investments, the
buy-to-let sector is all about knowing the market and picking the right options
and if you do, bricks and mortar remain a very sound one.”

The fees ban has also failed to cut the costs of
renting for tenants; while the legislation was said to save tenants on average
£70 a year in fees across the life of a tenancy and £300 each time they moved,
letting agents’ association ARLA Propertymark recently revealed that 64% of
tenants experienced rent hikes during the traditional busy month of August,
when tenants are most likely to move home.

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