A growing number of landlords are passing extra costs onto tenants by increasing rents, while others are simply opting to exit the market due to the government’s recent tax changes, new figures show.

More than a third – 35% – of letting agents saw rents increase for tenants in August, according to the latest PRS report from the Association of Residential Letting Agents (ARLA Propertymark), owed in part to a reduction in available rented housing stock, which is adding to the existing supply-demand imbalance in the market.

The trade body report that the number of properties managed per member branch dropped marginally in August, to 189 – down from 192 in July, while demand from prospective new tenants increased to 72 in August, up from 70 in July.

David Cox, ARLA Propertymark’s chief executive, said: “This month’s findings paint another bleak picture for tenants. In November last year, only 16% of agents saw landlords increasing rent costs, but that figure now stands at 35% – which is likely to continue rising.

“Landlords have had a rough ride at the hands of policy changes at Government level, and it’s becoming clear that these additional costs are now being passed onto tenants.”

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