The UK is facing a critical rental shortage as many landlords continue to offload properties due to recent tax a change, including the phasing out of mortgage interest relief, fresh analysis by Home.co.uk has revealed.
The research shows that there is a dearth of rental properties across the UK, with the issue most acute in London, where there has been a 20% drop in the number of properties available to rent over the last 12 months.
Over the corresponding period there has been a 12% fall in the number of available rental properties across the UK, placing upward pressure on rental values, especially in prime parts of the capital.
The property website reports that rents have increased by almost a quarter – 24% - in the London borough of Westminster since June 2017, while rents have also rocketed in Kensington and Chelsea.
The latest survey of the members of the Association of Residential Letting Agents (ARLA Propertymark) suggests the exodus of landlords looks unlikely to slow down.
Home.co.uk director Doug Shephard said: “The current situation is particularly dire for tenants, who are set to continue to face increasing competition for good quality properties and rising rents.
“Government red tape and higher taxation in the lettings market has triggered forced sales by landlords. Moreover, this additional supply is now negatively impacting on capital values. Vendor landlords have done their maths and they know that if they continue to let the property, even with a rent hike, they will be losing money overall. Conclusion: time to sell,” he says.
“The problem is, though, that the private rented sector constitutes 20% of the housing stock, the majority of which is owned by landlords with small portfolios. A recipe for disaster? Maybe. Negative sentiment in this sector is certainly sufficient to turn confidence in the wider property market to the downside, thereby creating misery for all, especially those wishing to rent.”
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