Rental hikes have hit a 14-month high as pressure continues to grow on the struggling buy-to-let sector.
The number of agents who saw landlords increasing rent costs for tenants rose to 31 per cent in June – up from just 27 per cent in May, according to an Association of Residential Letting Agents (now known as Arla) report.
This is the highest level since April 2016, when the figure was also 31 per cent.
The supply of rental stock rose 8 per cent year-on-year to an average of 190 properties managed per branch, while demand fell slightly, with an average of 61 new tenants registered per branch – down from 65 in April and May.
With landlords facing growing pressure from the government’s stamp duty hike and cuts to tax relief, as many as one in five landlords recently said they planned to raise rents.
Arla Propertymark chief executive David Cox said: “With the cost of living on the rise and inflationary pressures tightening, the last thing tenants need is for their rents to continue rising.
“However, the fact that supply looks to be rising, while demand has dropped slightly indicates a move in the right direction for the market. Ultimately, to stop rent prices from increasing too much, we need to find the balance between supply and demand.”
The report also revealed 83 per cent of letting agents want the government to scrap letting fees, while 73 per cent want it to focus on improving enforcement for rogue agents.
Meanwhile, more than three in five (62 per cent) want the new government to regulate the sector, while a quarter (26 per cent) think they should provide tax breaks to encourage longer-term tenancies.
Michelle Lawson, director at Hampshire-based Lawson Financial, said: “The writing has been on the wall since when it all came out about the tax hikes.
“This is exactly what was forecast would happen, and it has happened. As soon as they stop tenants paying reference fees, it will go up even more.
“Landlords have to offset the costs somewhere else. If they can’t get it from the letting agents or the government, there is only one way they can go – and that is the tenants.”