The government must move now to start supporting those that invest in the private rented sector or risk seeing significantly more landlords exit the buy-to-let market, resulting in an inevitable decline in much needed rental property listings, according to haart estate agents.
Without greater incentives for buy-to-let landlords, many will simply not be willing to offer longer tenancies and leave the market, adding to the growing supply-demand imbalance in the PRS that is starting to place upward pressure on rental values across many parts of the country.
The government’s decision to restrict mortgage interest relief to the basic rate of income tax and add a 3% levy on stamp duty for the purchase of additional homes is having an adverse impact on the PRS, and the estate agency fears that this will lead to a sharp rise in rents.
The latest data from UK Finance shows that gross mortgage lending rose by 7.6% to £24.6bn in July 2018 year-on-year ahead of this month’s base rate rise, and yet activity in the buy-to-let sector remained broadly flat.
Paul Smith, CEO of haart estate agents, commented: “Mortgage lending jumped a huge 8% on the year in July as existing homeowners sought to seal themselves into a lower rate ahead of the Bank of England’s interest rate hike.”
However, he said that landlords are still “feeling the pinch” with 12% fewer landlords buying property than the same time last year.
He added: “The buy-to-let sector is a fundamental part of the UK property market, and with fewer landlords, we are seeing rents rise.
“The government must stop penalising those who are willing to invest in the rental market and stop its needless crackdown on the sector.”