Tenants are facing higher rents as the supply of rental properties continues to fall due to George Osborne’s hefty, punitive tax changes, new figures suggest.
The Association of Residential Letting Agents (ARLA) report that the number of properties registered per letting agent fell year-on-year by 5% in April, which mean that renters will almost certainly face an even tougher time following the chancellor's stamp duty reforms, as landlords naturally seek to recoup their costs by hiking up rents, amid a shortage of homes on the rental market.
Years of failing to build the amount of residential properties needed has squeezed rental costs up significantly in recent years, and now it seems that Osborne’s misguided housing market policy risks exacerbating the issue, as his outright assault on buy-to-let landlords ignores the fact that the private rental sector offers an essential service for millions of adults who choose to rent.
The decline in the number of rental properties available, owed largely to higher stamp duty costs and lower mortgage tax relief, is widely expected to place upward pressure on rental values, as reflected by the fact that two-thirds of ARLA agents predict that the stamp duty reforms will push rental values up for tenants down the line.
The data from ARLA also shows that although there was an 8% month-on-month rise in the volume of properties managed per letting agent branch, as a result of a surge in rental property acquisitions in the first quarter of this year, the number of rental homes managed per branch is still lower than the same time last year, down from 193 to 183. This is further indication that long-term supply is decreasing while also implying that more landlords may be trying to save money by cutting management costs.
David Cox (pictured), managing director of the ARLA, said: “It’s likely that this increase in supply is only temporary. At the end of March we saw a flurry of landlords seizing the last few moments before the stamp duty rise to complete sales, triggering an increase in the supply of empty rental homes to be filled this month.
"However, we expect that fewer investors will be taking on buy-to-let properties over the next six months, following the price hikes, meaning that once these properties are filled we'll see supply nose-dive once again."