Rise in number of landlords selling up
The Association of Residential letting Agents (ARLA) said an average of four landlords sold up per branch, compared to three in February.
The last time the number of landlords selling their buy-to-let property rose above three per branch was in November last year, when the proposed ban on letting agent fees was announced.
The government is currently consulting on banning unfair letting agent fees to create more competition in the rental market.
In terms of rent prices, letting agents reported a month-on-month rise in the number of tenants successfully negotiating a price decrease. In February 2.2% of agents witnessed successful rent cuts, while in March the figure rose to 3.6%.
However, a quarter of agents saw landlords increase rents in March, a figure which has not changed since January. This is down seven percentage points compared with March 2016 when almost a third of agents saw rent increases.
The supply of rental stock remained stable in March, with agents managing 183 properties per branch on average.
Demand from tenants, meanwhile, rose slightly to 36 prospective tenants registering per branch in March versus 34 in February.
David Cox of ARLA, said: “It’s concerning that, despite supply increasing over last year, stock failed to return to the market after dipping in February. When we also consider that this is coupled with a rise in the number of landlords selling their buy-to-let properties, this is bad news for those searching for a rental property.”
Cox said the changes to mortgage interest tax relief, which came into force earlier this month, make the market less attractive to investors.
Under new rules being gradually phased in by 2020, landlords will no longer be able to deduct their mortgage interest before calculating how much income tax is payable.
“It appears some landlords are, as we predicted, choosing to exit the market rather than pay higher taxes,” said Cox.
Two thirds of letting agents quizzed said they were concerned the government will introduce more landlord taxes in 2017, which will dampen supply further.
Cox said: “Following the announcement of the ban on letting agent fees, we expect the situation to only get worse for tenants when inevitably the costs are passed onto tenants through higher rents. However, it’s positive that more tenants are taking action and negotiating rent reductions before the consultation ends and they see their rents increase.”