Shortage of rental properties will drive up rents.
The number of lettings agents reporting rent rises has hit the highest level since last July, ARLA Propertymark claims.
The trade body’s May Private Rented Sector report found 27% of agents saw rent costs rise for tenants in May, the highest level since July 2016 when 28% saw rents increase.
For the second month running, only 2.8% of tenants successfully negotiated a rent reduction. This figure had risen to 3.6% in March, suggesting their bargaining power is reducing.
Meanwhile, the supply of rental stock increased to an average of 189 per member branch, up 11% on last year, and the number of landlords selling up fell from four to three between April and May.
David Cox, chief executive of ARLA Propertymark, said: “Private rents rose by 1.8% in the 12 months to May 2017, and the last thing tenants need is for them to get even higher.
“With the new Government confirming a Tenants’ Fee Bill in the Queen’s Speech, we can expect them to rise by up to £103 a year, hitting loyal tenants looking for long-term agreements hardest.
“The only thing which could offset this would be to significantly increase rental stock, but until this happens and supply and demand meet in the middle, rents will only become more and more unaffordable.”