The head of franchise giant Belvoir says government interference in the rental sector is likely to result in a rise in rents throughout 2018 and into 2019.
“As 2018 progresses, landlords and tenants will find themselves shouldered with an extra burden of cost due to continued government interference in the rental market, which includes a decision to ban tenant fees and the implementation of punitive tax changes,” says Dorian Gonsalves, chief executive of Belvoir, which is now the UK’s largest High Street property franchise.
Gonsalves says that his firm’s latest rental index shows that rents increased by just £3 a month compared to the same period last year, which demonstrates that the rental market is working well for most landlords and tenants across the country.
However, as a consequence of the impact of government policies he says increases are on the way. “This is a real shame, as in our experience many landlords have resisted increasing rents when they have a tenant in situ, but this is likely to change” he adds.
But he has not seen any sign of an exodus from the sector by investors, despite political issues.
“With all the uncertainty surrounding Brexit, we believe that property remains a simple, unsophisticated and reliable investment for over two million UK landlords. We are, however, noticing that those new landlords who are entering the sector, are doing so with lower borrowing, and they are looking for a stronger return on their cash.
“To many of the UK’s smaller investors, property represents a relatively strong investment, and more importantly, it is an asset that they can touch, see and pass on to family members in the future. We predict that this is unlikely to change for a very long time.”