Activist groups say landlords are being pressured by their letting agents into increasing rents.
Generation Rent, led by Baroness Alicia Kennedy, and the London Renters Union have both spoken out in the Financial Times against letting agents, suggesting they are pushing landlord clients to increase rents so their fees, in turn, will rise.
Using what Generation Rent claims to be its own “exclusive” figures, the FT says that when tenants facing rent rises asked their landlords for an explanation, 17 per cent cited letting agent advice as the reason for raising the rent. This was according to a survey by Generation Rent - it says over 1,000 renters in England were consulted.
Only 11 per cent of landlords in the same survey cited mortgage costs as the reason for increasing rent.
The survey also found that a third of prospective tenants had been asked to attend what the FT calls ”mass” viewings with other renters, while a quarter were asked for multiple months’ rent in advance and a fifth had been told to offer higher rent to secure a home.
Dan Wilson Craw - Kennedy’s deputy at the Generation Rent group - is quoted as saying: “Letting agents are making life harder for tenants, making the whole process more stressful.”
Michael Deas, a co-ordinator for the London Renters Union, tells the FT: “Rents don’t just go up — they are inflated by . . . agents and the market reports they put out.”
No landlords or tenants behind the claims are named by Generation Rent or the LRU. However, agents quoted in the article refute the claims.
“Prices are going up because of tenants competing and making competing offers” says Greg Tsuman of London agency Martyn Gerard - he is president-elect of ARLA Propertymark and tells the FT that agents were often advising landlords to go for lower prices because they would be more sustainable in the long run.
Guy Gittins, chief executive of Foxtons, says: “People want to see these properties. If everyone is fighting for the property, it’s stressful. Guess what, it’s stressful for the agent too, it’s not an environment we welcome. We sympathise with the renters of London; it is a supply and demand dynamic that is not healthy.“
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Basic economics seems to have slipped past generation rants radar
SMH
Agents don't need to tell me to put up my rents. My costs dictate my rents and they are going up.
its simply supply and demand and increasing costs of running a portfolio. All brought about by the Government. Are Gen Rent accusing the supermarkets of similar reasons for increasing prices? Maybe some basic maths training is required!
I increased rents for the first time ever for existing HMO tenants in October. I fully explained it was due to the rising utility costs. Next year 5 of my mortgages reach the end of their fixed term so rent increases will be spread across the portfolio to try to accommodate some of the increased costs.
When tenants used to move house frequently it was easy enough to just increase rents between tenancies. Now tenants stay much longer and a combination of the government inventing extra taxes for landlords to pay, the BoE increasing interest rates and general inflation on property maintenance means regular rent increases for existing tenants are becoming more and more essential.
I don't like putting the rent up of good excising tenants, I try to keep the increases to a minimum , far easier to up the rent on change of tenancy
I don't use letting agents any more, but to be fair if they were to advertise a property below current market rent they would be inundated especially with the "desperate". So can't blame them for advising at a higher figure to try and weed out those who can't afford it. Strangely just seen a property in the same road as one of mine being advertised too cheap (same rent as mine actually) they are going to be swamped.
I take your point, but even at full market rents we still get the ''desperate'' viewing that couldn't possible afford to pay the rent, just wasting everyone's time
Affordability isn't an issue with the opportunity for quite a while rent free while eviction proceedings grind through.
Solvent property owning guarantors are now essential.
Generations rent and charities like them, should take their own slice of responsibility for bringing about a miserable situation for renters. They got nearly everything they asked for, which has had significant impact on the profitability of BTLs - rising costs, taxes and regulations have had the predictable result of increased rents, reduced supply and increased demand.
Yes Generation Rent et al, this perfect storm of misery is exactly what you have demanded. Stop blaming everyone else, they are just responding to the changes you have been campaigning for.
Their logic, yet again, is flawed. If I am looking to increase rent I always ask his advice on what is a fair rent as he is the expert, not me. He has nothing to gain from this other than paymfor his time as I manage our properties myself.
They need to justify their claims with hard facts not twisted rhetoric
I have a letting agent managing one property, over the last 2 years they have suggested a small increase each year with 12 months contract. I have another property with a different letting agent. The tenant is on a periodic contract. Over the last 6 years the agent has not suggested a rent rise. So I guess it varies between agents.
They need someone else to blame other than themselves and Shelter 😰😰. There is no saving renters, the path is set for them.
I had a prospective tenant offering to pay £100 pcm more than the advertised rent. Nothing to do with the managing agent as Generation Rant [sic] want people to believe.
And as I'm not a greedy landlord, I recall another claim of them and their associate pressure groups, I didn't accept the extra £100 each month; and said I'm not keen on gazumping.
Also, I don't go around spreading lies like I've seen Gen Rant and Crisis do (formal complaint about a Crisis lie likely, then to Charity Commission).
We have moral high ground (says a somewhat smug me).
I wouldn't have accepted the bribe either, I would have smelt a RAT there
I believe that there is some truth in this article. I'm sure agents have told Landlord's to increase their rents. I am also sure that those whom have no mortgage will benefit more than those with mortgages.
Hence I am selling to massively reduce my loan to value. Having done the math I should be able to be mortgage free on 2 properties and have a small mortgage on the third property. Hopefully all achievable over next 3 years!
The simple fact is that the legislation that this current non tory Government have subjected the PRS is the main cause of these rent increases. I would add to this the incompetency of the Bank of England over the last 15 years and lastly a growing number of tenants that flout the law/rules and require Landlords to further protect themselves financially.
If these so called charities have think it has been bad the last few years, well they will go into meltdown with what is going to happen next!!
"this current non tory Government and the incompetency of the Bank of England over the last 15 years" sums up the current situation very well.
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