Rental supply falls in nine out of 10 towns
The second home Stamp Duty surcharge has already started to affect the rental market.
The Government’s Stamp Duty hike on second homes is already having a impact, as rental properties listed by landlords in May were down 5.7% on March levels, according to research by Property Partner.
The property crowdfunding platform said that last month saw a sizeable, but not surprising, 15.4% drop in new rental listings, after the new Stamp Duty surcharge was introduced.
And new listings fell so far in many areas of the country in May, that they actually dropped below March levels, before the 3% hike came into force.
May saw new rental property listings fall in 91% of those towns and cities, with Worcester experiencing the biggest drop – 42.6%, following a 48.9% surge in new listings in April. New rental listings were also 14.6% below March levels. Bedford also saw a huge 41.7% drop in new rental listings in May compared to April, and 33.5% down on March.
Dan Gandesha, CEO of Property Partner, explained the fall in supply: “As anticipated, the rush of investors buying before April’s Stamp Duty hike caused a temporary spike in rental supply, which now seems to have been swiftly reversed.
“With high and rising demand, any prolonged fall in rental supply would only have negative consequences for tenants.
“It’s likely that rents would increase as landlords, facing less competition, pass on their additional purchase costs to tenants.
“A lack of available properties would also force more tenants into accepting poorer quality accommodation, particularly in areas with an acute shortage of stock.”