The threat of rent controls in two parts of the country may now be so severe that buy to let landlords and not buying new properties - diminishing the rental market and curbing house price growth in the affected locations.
This analysis comes from the property website Home, which publishes a monthly sales and letting market snapshot.
It says that annualised sales price growth in Greater London is a mere 3.7 per cent right now - significantly lower than much of the rest of the country, with the exception of Scotland, where it’s just 2.2 per cent.
Home notes: “These two markets are currently the slowest of all despite some improvement. It is also worth noting that both markets are increasingly menaced by the threat of rent controls, which is a clear disincentive for buy to let investment.”
Last week London Mayor Sadiq Khan has released an analysis - based on estate agent Savills forecasts - showing that freezing private rents in the capital for two years would take £2,988 from landlords, with £881 in the first year and £2107.60 in the second year.
“Private renters make up nearly a third of everyone living in the capital and they are set to be hit by a devastating combination of price and bill rises. Too often the needs of private renters are ignored by both landlords and the government” says Khan.
“Rising fuel and energy costs – which will hit renters in energy inefficient homes the hardest – are already causing anxiety and stress, with a big rise in the energy price cap due next month. That’s why today I’m calling on ministers to give me the powers to stop rents rising in the capital, and help me to give people a chance to get back on their feet after the pandemic” he continues.
And in Scotland a consultation process initiated by the government closes next month, on a set of proposals including restricting evictions during winter, national rent controls, and establishing a private rented sector regulator.
Meanwhile in the wider rental market, the Home website paints an upbeat picture with rents across the UK on average rising at an annualised rate of 10.1 per cent.
It says: “Most of this increase is driven by the phenomenal rebound in Greater London rents which indicate annualised growth of 27.3 per cent, concomitant with a collapse in lettings supply. There were just under half the number of properties to let entering the capital’s market compared to a year ago.
“Demand in the regions, especially in the North and West, has eased and rents are either rising more slowly or correcting in the wake of the lockdown boom.
“The annualised mix-adjusted average asking price growth across England and Wales is now at 7.4 per cent; in March 2021, the annualised rate of increase of home prices was 4.8 per cent.”
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Over the last six to nine months every decent property has had many people after it and with the Scottish offers over system I don't recognise any problem with capital appreciation stalling.
I suspect it may be that many cheaper flat owners have been selling to buy houses with gardens or more rooms, so that has skewed the figures to show a lower average sale price as a higher proportion of cheaper properties have been sold than is usually the case in a normal property market.
People reporting figures should have a better understanding of how these figures are derived.
Leasehold flats aren't selling too well, but freehold houses and bungalows certainly are round my area.
I'm not buying as much as I would like to, the money's sitting there, too much uncertainty, we don't know which stick the government is going to hit us with next
I agree with both of your above posts.
Not selling but not buying either - thinking of making a cheeky offer for Abramowitz's bigger yacht ( not the smaller one - I've got neighbours to impress!)
4.4 million landlords in the prs
Keep this load of twaddle up and it’ll be 4.4 dozen
So there is an acute lack of supply and the answer is to do everything they can to reduce supply further??? How about removing section 24 and then landlords would have a chance of making a profit. But no let’s get a bigger stick and see if that works!
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