The overwhelming majority of letting agents say rents will rise in London next year when a proposed ban on letting agents’ fees comes into force.
Chancellor Philip Hammond’s announcement in November’s Autumn Statement that letting agents’ fees for tenants would be banned ‘as soon as possible’ led to speculation that these costs might still be passed on to tenants in the form of higher rents.
Now The Association of Residential Letting Agents’ most recent market survey says that four in five letting agents think rents will increase over the next 12 months.
This remains to be seen, but most of the changes affecting landlords have already been introduced. Most notably the extra 3% surcharge on stamp duty for buy-to-let investors, which affects those looking to invest in areas like Belgravia.
However, the sway of prime central London property has not deterred buyers and investors. Overseas investors buying buy-to-let property in the luxury market have remained active since the EU referendum, taking advantage of the fall in value of the pound.
We expect rental demand to continue next year in prime areas like Belgravia. Buy-to-let investors remain confident in the luxury rental market, especially as many overseas tenants and international students will always favour these parts of London.