No Christmas cheer from letting agents
Two in five letting agents have predicted that the supply of rental properties will decrease over the next five years, according to the Association of Residential Letting Agents’ (ARLA) monthly Private Rental Sector (PRS) Report. This marks the highest number of pessimistic agents this year as the impact of tax changes begins to be felt by landlords.
David Cox, managing director of ARLA, said: “This month’s findings are triggered by the Chancellor’s announcements around buy-to-let (BTL) tax in his Autumn Statement. When the rabbit was first pulled out of the hat, we said these changes would be ‘catastrophic’ for the rental sector and this has been echoed by letting agents across the country. The new Stamp Duty increases will make owning a BTL unprofitable for a lot of landlords, and certainly make new investors think twice about purchasing a BTL property.”
Rental market snapshot
The number of tenants that have experienced rent increases continues to fall, with less than one quarter (23%) of letting agents reporting rent increases for tenants in November, down from 25% in October – and the lowest this year.
Demand for rental properties increased slightly in November, as tenants begin looking for new rental properties for the New Year. ARLA agents registered an average of 34 new tenants per branch this month, up from 33 in October.
Supply of rental accommodation also increased by 9%, from an average of 173 properties managed per branch in October, to 189 this month.
Cox said: “It’s promising to see that the number of agents reporting rent increases is continuing to decline, and this should spread some Christmas cheer amongst renters renewing tenancies or looking for a new property to rent. However, just under a quarter of tenants are still unfortunately seeing hikes in their monthly rent payments. But if we continue to follow trends we’ve seen in previous months, we should see fewer tenants experiencing increases as we welcome in 2016.”