Forty per cent of letting agents are predicting supply will decrease over the next five years – the highest rate this year, according to the Association of Residential Letting Agents.
The findings come following the latest stamp duty increase on ‘additional homes’, set to come in to effect in April.
“When the rabbit was first pulled out of the hat, we said these changes would be ‘catastrophic’ for the rental sector and this has been echoed by letting agents across the country. The new stamp duty increases will make owning a BTL unprofitable for a lot of landlords, and certainly make new investors think twice about purchasing a BTL property” claims David Cox, ARLA’s managing director.
Meanwhile the same ARLA survey reveals that tenants experiencing rent increases continue to fall in number, with only 23 per cent of letting agents reporting rent increases for tenants in November, down from 25 per cent in October, and the lowest this year.
Demand for rental properties increased marginally in November, alongside supply of available housing – probably a result of tenants preparing themselves to find new rental properties in the New Year.
ARLA agents registered an average of 34 new tenants per branch this month, up from 33 in October.
Supply of rental accommodation also increased in November, rising by nine per cent, from an average of 173 properties managed per branch in October, to 189 this month. However, renters in the capital will still struggle to find a property, with only 121 properties managed per branch – 36 per cent less than the UK average.