Following a year dominated by Brexit uncertainty, political instability, higher interest rates and more stringent mortgage regulations, many buy-to-let landlords will be looking for far more stability in the housing market in 2019.
Weaker economic conditions, affordability problems for buyers and stringent lending conditions will inevitably lead to greater demand for the rented sector, at a time when the supply of property in the sector is falling.
Undoubtedly, 2018 was another tough year for landlords. With so many tax and regulatory changes over the past couple of years, including the introduction of higher stamp duty purchasing costs, the scrapping of the wear and tear allowance and the phasing out of landlords’ mortgage interest tax relief, there has been a major drop in the number of buy-to-let acquisitions.
The lack of competition from landlords for properties will inevitably reduce the supply of much needed housing in the private rented market at a time when some buy-to-let landlords are actively reducing the size of their property portfolios or exiting the buy-to-let market altogether.
More than three quarters - 78% - of ARLA Propertymark members think the number of landlords operating in the private rented sector will fall even further in 2019 as they are driven out by rising costs.
Given that those landlords who remain in the sector are faced with continued legislative change and increasing costs, many are expected to pass the costs on to tenants in the form of higher rents.
Countrywide estimates that rents are likely to rise 2.5% in 2019, followed by growth of 3% in 2020 and a further 2% in 2021.
A separate prediction report issued by RICS suggests that rents will increase by 15% over the next five years.
Whatever happens in 2019, we will continue to keep you up-to-date with all the latest news, views and trends across the private rented sector.
The team at Landlord Today wishes everyone a happy, safe and successful New Year!