A seasonal lull kicked in as the supply of available rental properties dropped, alongside falling demand, according to the Association of Residential Letting Agents (ARLA) December Private Rental Sector report.
ARLA agents registered an average of 29 prospective new tenants last month, down from 34 in November – a decrease of 15%. Supply also decreased marginally in December, with an average of 182 properties managed per branch, down from 189 in November. Those looking for rental properties in the capital continue to struggle, with an average of just 108 properties managed per branch, 43% less than the national average.
Alongside supply and demand, the number of tenants seeing rent hikes also dropped in December, with only two in ten (18%) ARLA letting agents reporting a growth in rent – a drop of five percentage points from November and the lowest reported in 2015.
David Cox, ARLA managing director, said: “As we’d expect in December, the UK saw a lull in activity, with people putting off any moves until January. The supply of housing stock was down, and fewer tenants were on the hunt for new properties. It’s reassuring to see the number of agents reporting rent increases is still on the decline – some encouraging news for tenants as we start 2016.”
The stamp duty reforms to buy-to-let properties announced in the Autumn Statement are causing concern amongst ARLA letting agents. Two in three (62%) agents predict the changes from April will push up rent costs, and a further two thirds (65%) predict the new reforms will push landlords out of the market after April, and decrease supply.
However, the announcement is having an immediate effect on landlords, as a quarter (24%) of agents have seen uplift in interest from buyers looking to invest in BTL properties before the new changes come into play in April.
“With supply, demand and the number of agents reporting rent increases all declining in December, this could well be the calm before the buy-to-let storm. Buy-to-let landlords determined to complete purchases before the changes come into force in April are storming the UK housing market, meaning the lull we’d usually see is less significant,” said Cox, “But subsequently, after April, we’re very likely to see the number of buy-to-let properties on the market begin to decrease, and this will most certainly have a detrimental effect on renters across the country.”