There has been a significant increase in the number of landlords exiting the buy-to-let sector due to higher stamp duty costs and the phasing out of mortgage tax relief, a new study shows.
Estate agents reported an average of four landlords selling properties per branch last month, up from three in February, according to the research from the Association of Residential Letting Agents (ARLA Propertymark).
The last time the volume increased above three per branch was in November last year, when a ban on letting agent fees was announced by the Chancellor Philip Hammond during his Autumn Statement.
With landlords quitting the market, there will seemingly be fewer rental properties available to let, and yet the number of registered tenants per branch increased, albeit marginally, from 34 in February to 36 last month.
However, the research, based on an online survey of 331 member branches between 3 and 10 April 2017, carried out by Opinium Research, found that the number of agents witnessing rent reductions increased from 2.2% to 3.6%, with a quarter seeing landlords increase rents – down 7% year-on-year.
Somewhat worryingly, two-thirds (66%) of ARLA Propertymark members fear further landlord taxes will be introduced this year, which will only “further dampen supply”, according to David Cox, ARLA Propertymark’s chief executive.
“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,” he said.
Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.
.png)
Join the conversation
Jump to latest comment and add your reply
Local Councils are reaping what Central Government has sown.
Councils are crying out for properties to place homeless people, but with fewer properties, taxes on Landlords rocketing; payment issues due to Universal Credit; the "NO DSS" are going up fast. Councils are already having to incentivise Landlords to take homeless people; some with just an upfront payment, other offer rent guarantees and damage payment guarantees.
This is just the beginning!
Rents, if they haven't already, will start to go up as s.24 kicks in
I have to agree with Barry. I have put up all my rents to cover the additional costs of the changes to legislation introduced over the past 2 years; the first rise some of my tenants have had in 5 years.
Homelessness is an increasing issue in my area of Merseyside. Many agents and landlords want to help but the Government's policy seems disjointed. The government want the PRS to house low wage tenants and keep the rates of LHA down. They then insist we pay substantially more tax to central government due to s.24, more money to local government in the way of licensing fees and compliance costs and higher purchase costs due to the SDLT changes.
Government cannot afford to build the hundreds of thousands of extra houses the country needs. They certainly can't afford the costs of renovating and improving the existing poor quality stock that is the target of much of the PRS investment. The country therefore needs a functioning private sector that sees investment in housing to be a worthwhile use of their time and money. All the recent changes do nothing but drive investment away from the sector.
We are long overdue a grown up discussion of the issues around housing affordability, home ownership and the relationship between government, landlords and tenants. There is so much that can be done to improve "the system" to decrease homelessness, whilst still making the concept of BTL attractive to investors and without bankrupting the state with excessive LHA payments.
I had some useful meetings with Frank Field MP, chair of the Commons Work and Pensions Select Committee. He seems receptive to many of the ideas put forward by the PRS representatives and I am hopeful he can carry forward some of these ideas in the next parliament. Despite being a long time Labour man he is not stuck toeing the party line on housing issues. His committee can help with many of the things that discourage landlords from letting to benefits recipients: late payment of UC, rent guarantees, direct payments and safeguarding, credit / fir and proper person checks, etc.
Housing is one of the hot button issues in the election. Please, all you politicians, don't make any more silly promises on housing. We don't want to be stuck with policies after the election that will make it substantially less attractive to invest in the housing stock that the whole country needs.
Please login to comment