Thousands of people across the North East could be locked-out of property rental because of new rules coming into effect this summer, according to a North East estate agency.
The Tenant Fees Act 2019, which is the Government’s approach to banning letting fees paid by tenants in the private rented sector and capping tenancy deposits, comes into force later this week (1 June).
The move, which will restrict agents and landlords charging tenants lettings fees, could reportedly force many landlords to raise rents to cover losses, says Crook-based letting agents Vickers & Barrass.
Edd Forster, property sales manager, said: “This could make long term rental more difficult for tenants on low incomes who could well see their overall long-term costs increase.
“The new rules may see renters saving initially as they will not be paying administration and referencing cost upfront, but landlords could look to increase rents to recoup costs.”
Property renters will still be required to provide a deposit now limited to the equivalent of five weeks rent or six if the annual rent is £50,000 or more and the first month’s rent when taking on a new agreement.
He added that the new rules appear to be yet another hit for landlords and agents to bear, restricting them further and adding another layer of financial burden.
“These things are always a question of balance for landlords and letting agents, who have faced continued regulatory change and increasing costs over the last few years.
“We could see more landlords exit the market. This will only lead to a lack of suitable rental accommodation at a time when there is a chronic shortage of quality stock to let.
“Simply put, we may well see more and more local people locked out of the property market due to a lack of housing stock in the face of an exodus of landlords.”
The news comes as the firm continues to see the volume of lettings increasing and is actively seeking more properties to meet rental demand: “We will be watching developments with caution while continuing to support landlords,” said Edd Forster.
Vickers & Barrass offers a professional sales and lettings service for residential and commercial property across the region. It’s part of a firm of rural chartered surveyors and estate agents, who provide professional land agency and surveying services to farmers, estates and landowners.