Estate agents blamed for frenzy in UK rental market

Letting agents whose revenues have been boosted by higher rents have been blamed for fuelling costs that are “making life harder for tenants”.

Rents on new tenancies in the UK increased 12 per cent in the year to December, according to Zoopla, compared with an inflation rate of around 9 per cent.

In London, average rents have risen 17 per cent in a year, adding to the pressure on tenants who are also contending with steep rises in the costs of food, energy and fuel.

Generation Rent and the London Renters Union, groups that represent tenants, suggested the frenzied market conditions were being fanned by landlords and their letting agents.

When tenants facing rent rises asked their landlords for an explanation, 17 per cent cited letting agent advice as the reason for raising the rent, according to a survey of more than 1,000 renters in England conducted by Generation Rent.

That compared with 11 per cent of landlords citing mortgage costs as the reason for increasing rent.

The survey found that a third of prospective tenants had been asked to attend mass viewings with other renters, a quarter were asked for multiple months’ rent in advance and a fifth had been told to bid up rents to secure a home.

Dan Wilson Craw, deputy director of Generation Rent, said rent increases were “symptoms of a market where there is a shortage of homes, but letting agents are making life harder for tenants, making the whole process more stressful” with competitive bidding processes and mass viewings.

Agents refuted the claims that their behaviour had distorted the market.

“Prices are going up because of tenants competing and making competing offers,” said Greg Tsuman, letting director at estate agent Martyn Gerard and president-elect of trade body the Association of Residential Letting Agents.

Guy Gittins, chief executive of estate agent Foxtons, said: “People want to see these properties. If everyone is fighting for the property, it’s stressful. Guess what, it’s stressful for the agent too, it’s not an environment we welcome.”

“We sympathise with the renters of London; it is a supply and demand dynamic that is not healthy,” said Gittins, adding that Foxtons was registering 18,000 tenants per week in the peak summer months.

The surge in rental demand has been a boon for agents — Foxtons’ revenue from its lettings business increased 18 per cent year on year in the third quarter.

Rather than driving up prices, Tsuman claimed letting agents were often advising landlords to go for lower prices because they would be more sustainable in the long run.

High tenant turnover can be in the interest of letting agents, who often charge extra to landlords for finding new tenants, according to Wilson Craw.

Michael Deas, a co-ordinator for the London Renters Union, said: “Rents don’t just go up — they are inflated by . . . agents and the market reports they put out.”

The LRU said one of its members faced being evicted over Christmas after their landlord increased the rent by about 10 per cent.

“When we spoke with [the managing agent] they revealed they were only prioritising prospective tenants who could pay a year’s rent upfront — which for our property is £21,000. We felt absolutely dehumanised. We are losing our home over the holidays,” said the tenant.