With the Tenant Fees Act coming into force on 1st June in England, letting agents and landlords are being warned to prepare for an increase in tenant activity.
No Letting Go, provider of inventory services in the UK, says that many tenants are waiting to move homes after 1st June, in order to avoid paying any upfront fees and to benefit from capped security and holding deposits.
This warning follows recent research from The Deposit Protection Service (DPS) suggesting that tenants could be delaying their move until the Tenant Fees Act officially becomes law in a couple of weeks’ time.
According to the study, rents dropped during the first quarter of 2019, which meant that the average rent across the country during the first three months of the year had fallen to £757. This is a drop of £5 (0.64%) from the last quarter of 2018 and £14 (1.87%) from the first quarter of if 2018.
The DPS has said that this drop-off is down to a range of economic factors, as well as a period of ‘tenant inactivity’ leading up to the fees ban.
Nick Lyons, CEO and Founder of No Letting Go, says: “It’s no surprise to see shrewd tenants delaying moves until after the fees ban and deposit caps are introduced on 1stJune.
“The upfront cost of moving between rental homes can be high – particularly in London and the South East – so renters will do anything they can to keep costs down, even if that means putting their move on hold for a few months.
Lyons has said that although this recent dip in activity may have allowed extra time for agents and landlords to prepare for the new system, they should expect a significant increase in tenant activity from June onwards.
Lyons also commented: “Tenants are likely to have continued searching for properties over the last few months and will be keen to push their moves through as quickly as possible so they can be settled in their new property for the majority of the summer months.”
No Letting Go also wants to remind landlords that once the five-week deposit cap is enforced, an independently compiled inventory will be even more valuable towards protecting their investment.
Lyons said: “Inventory reports confirm the condition of a rental property at the beginning and end of a tenancy. The presence of this document provides landlords with the evidence to make fair deductions for damage and lost items.
“With the fees ban likely to reduce average deposits in some areas, it’s vital that landlords have peace of mind that their property is protected by an inventory that can support them in the event they need to make deposit deductions.”