Is it the best time to Become A Landlord?

Recently, a report compiled for ARLA highlighted the current state of the property market and things appear to be looking good for landlords.

According to the report from Capital Economics for ARLA, demand for rental accommodation has risen month on month by 10& since September 2016 and March 2017, however, supply of rental accommodation has remained the same. This means that the likelihood of your property letting quickly and generating a rental income is also increasing.

Alongside this, rent is increasing though the rate in which rent is increasing is falling, this does mean that for the time being, you’ll be able to earn more rent though it is important to be prepared for future rent increases to fall incrementally in line with the rest of the private rental sector. This does however mean tenants will be happier over time and therefore more likely to stay long term, this means far fewer void periods or excess fees associated with reletting and remarketing the property.

However, you may have heard of the Tenant Fee Ban that has been not much more than a rumour in parliament up until recently when the government drafted the Tenant Fees Bill. The bill informs us that the intention is to ban landlords and agents from taking payments from the tenant with the exception of rent, capped and refundable security and holding deposit, as well as capped tenant deposit fees. It caps holding deposits at no more than one weeks’ rent and security deposits at no more than 6 weeks, it also proposes requirements to return the holding deposit to tenant.

What does this mean? Well, it can mean multiple things. From an agent’s standpoint, it’s 20% of the industry’s turnover which must be recovered from somewhere. This may mean increased costs or commissions payable by landlords or increased rent for tenants (estimated to be at least £103 per year) which will naturally mean an increase in the amount of commission paid to the managing agent.

Landlords and letting agents alike understand the impact of banning tenant fees. It costs money to ensure tenants are the right fit for a property, landlords and agents pay fees to perform background and credit checks, as well as take time out to show potential tenants around properties. By not charging these fees on to tenants, we will see a massive increase of tenants who know they’ll fail any vetting processes yet still ‘try their luck’ or simply aren’t serious about renting the property, this will also see an increase in expenses paid by landlords and agents which will then have to be further subsidised by rental increases. This is certainly not a good sign for tenants and in our opinion, a massive oversight on the government’s part; we can only absorb the costs so far. Cost of renting in the private sector is already unaffordable for many which an average person will have spent 16.4% of total earnings being spent on rent before purchasing their first home and, as house prices continue to soar, this statistic is only set to increase.

Rent is also likely to increase because of the shortening of rental accommodation supply as a result of the government’s Right-to-Buy scheme which allows tenants of housing association properties to purchase their homes, however, this could also lead to an increase of homes becoming available to rent within the private sector over time should these new homeowners become landlords.

There have been substantial increases in stamp duty over the years which has made buy-to-let investments far less attractive, this has also contributed to the tightening of rental accommodation supply in the UK and as a result of this, it has contributed to the rise of demand for rental accommodation. However, in the latest government budget, stamp duty has now been axed for first time buyers. This makes purchasing more attractive for first time buyers though the rules of stamp duty exemption on first time purchases for the intention of letting the property currently appears unclear.

Overall, we can see that the property market is quite turbulent right now though everything appears to indicate increased demand for rental accommodation and housing overall and year on year rental income increases for the foreseeable future, which, for better or for worse for tenants and letting agents, means more money in your pocket! It really has never been a better time to let your property.


  • New Agency of the Year 2018 The Negotiator Awards 2018 Harry Albert Lettings & Estates
  • Excellence Award: Best Property Management Company in Leicester Harry Albert Lettings & Estates: Letting and Estate Agent in Leicester, Presented by Bark

  • Harry Albert Lettings & Estates has been shortlisted for New Agency of the Year 2018 at The Negotiator Awards and won the Gold Certificate of Excellence for being one of the best property management companies in Leicester.
  • Residential Landlords Association Leicester Letting Agent Harry Albert Lettings & Estates
  • TheHouseShop
  • HouseLadder
  • HouseLadder
  • Property Redress Scheme
  • Marks Out of Tenancy
  • Deposit Protection Service
  • Information Commissioners Office
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