Letting agents have reported an increasing number of landlords selling their buy-to-let properties during March.
The latest ARLA Propertymark Private Rented Sector report showed an average of four landlords per branch had announced plans to sell up last month.
No reason is given for the decision but it does coincide with the rolling back of mortgage interest relief.
The last time the number of landlords selling their buy-to-let rose above three per branch was in November last year, when the fees ban was announced.
David Cox, chief executive of ARLA Propertymark, said this showed tenants were already being hit by the buy-to-let tax changes.
Tenants do appear to be getting more savvy, though, with 3.6% of agents reporting rent reductions, compared with 2.2% in February.
There were still increases with 25% reporting landlords had raised rents, down from 32% last year.
Meanwhile, the supply of rental stock remained flat at 183 since February, but was 8% higher since March 2016.
Members had 36 prospective tenants registered, up from 34 in February.
Cox 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 properties, this is bad news for those searching for a rental property.
“The introduction of mortgage interest relief means the market is becoming less and less attractive to investors and it appears some landlords are, as we predicted, choosing to exit the market rather than pay the higher taxes.
“What’s more, two thirds of our members are concerned the Government will introduce even more landlord taxes in 2017, which will only further dampen supply.
“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 on to 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.”
I’m still trying to get my head round the whole idea that London rents will go up as a result of upcoming tenant fee ban. It would be great to hear your opinion on this.
The property industry media, along with various industry commentators and “pundits” are suggesting that agents will pass on all or part of tenant fees to landlords and landlords to tenants.
Rents are determined by demand – so with no change in demand, surely there will be no change to rent values? (ie rents actually achieved, as opposed to asking prices). I can understand that in a rising market tenants will pay over the odds for properties, but since we are not in a rising market (and no expectation for above inflation rental growth in London in the near future), I can’t see how rental values will go up.
See Property Industry Eye article about sub inflation rent rises – http://www.propertyindustryeye.com/rental-prices-growing-two-times-slower-than-general-inflation/
Asking prices may rise, but that is totally different. Tenants will only offer an amount that is in line with what a property is worth to them, no more, no less. Increased asking prices will not force tenants to offer more. Landlords may choose to wait longer to achieve higher rent, but this may just cause longer voids.
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