Has the ban on letting agent fees really pushed up rent?

January 25th, 2013 | Posted by admin in Uncategorized

Last week EPTAG received a request for someone to speak to a journalist about the rising costs of renting.  I suspect they wanted us to tell them that rent is increasing, which is a hardship for our members.  I gave them a quote, which you can read in the article here.

There’s no doubt that we live in difficult economic times, with food and fuel costs skyrocketing, basic human needs are becoming difficult to meet. This is particularly the case for those of us who rent privately, who tend to be on lower incomes.  Affordable stable housing is vital, and consistent rent is a big part of that.  Renting in Edinburgh aint cheap  – it’s one of the most expensive places to live in Scotland – though still cheaper than Aberdeen, London and the South of England.

But is it increasing? And if so, why? The article in the Evening News claimed that rents were increasing because tenants were no longer able to be charged tenancy fees.

The increase they claim is 5% in the last quarter. The letting agents and their partners have only 3 months of data to make this claim. I would argue it is impossible to see a pattern over such a limited time period – and that this is a disingenuous use of data.

The article also fails to take into account the fact that rents actually decreased dramatically in 2012.  An earlier BBC report shows that ‘rents tumbled’ in Spring 2012. In that report the average rent fell from £813 in late 2011 to £796 in April 2012.

The rise we have experienced in the last quarter brings average monthly rent up to £819 – barely more than average rents in late 2011.  Analysing data from the same time period shows very little change, so it seems that other explanations for the current increases are likely.

I would question whether looking at an average rent is the most accurate method of comparison. I am no statistician, but from what I remember about mean, median and mode – if you take an average rent, very high rents will drive up the average, even if they are atypical. Edinburgh has some fabulous and expensive properties, and a fair few wealthy students and young proffesionals. What they pay for their New Town pads will drive up ‘average’ rents.  Certainly £819 per month for a 2 bedroom property sounds like a lot to me, most people I know pay much less.

It would thus make more sense to look at median (middle) and mode (most common) rents, to get a real picture of what is going on in the private tenancy market for the majority of people, in particular the ones without a spare £100 to throw at a letting agency at the start of a tenancy.

So rents may, or may not be increasing. My personal experience is that my rent now is similar to what I would have expected to pay 5 years ago but hey – that’s just me.  If they are increasing, is it because letting agents are unable to charge fees? There seems to be little proof for this; certainly, there is no proof offered by this article. Of course, at EPTAG we want to fight for affordable safe housing; whether that means fair rent or not being ripped off by letting agents, but it is important to look at what is actually happening and what the real issues are for tenants.

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