The lettings market is now enjoying ‘the calm before the storm’ according to the Association of Residential Letting Agents.
In its latest market report is says the number of prospective tenants dropped 15 per cent in December, while supply also marginally decreased, with around a quarter of agents seeing a likely uplift in buy to leave investments as landlords rush to get in before the April deadline for the introduction of a three per cent stamp duty surcharge.
ARLA agents registered an average of 29 prospective new tenants last month, down from 34 in November – a decrease of 15 per cent.
Supply also decreased marginally in December, with an average of 182 properties managed per branch, down from 189 in November.
Those looking for rental properties in London continue to struggle, with an average of just 108 properties managed per branch, 43 per cent less than the national average.
Alongside supply and demand, the number of tenants seeing rent hikes also dropped in December, with only 18 per cent ARLA letting agents reporting a growth in rent – a drop of five percentage points from November and the lowest reported in 2015.
“As we’d expect in December, the UK saw a lull in activity, with people putting off any moves until January. The supply of housing stock was down, and fewer tenants were on the hunt for new properties. It’s reassuring to see the number of agents reporting rent increases is still on the decline – some encouraging news for tenants as we start 2016” explains ARLA managing director David Cox.
Meanwhile 62 per cent of agents predict the stamp duty changes from April will push up rent costs, and a further two thirds predict the new reforms will push landlords out of the market after April, and decrease supply.
However, the announcement is having an immediate effect on landlords, as 24 per cent of agents have seen uplift in interest from buyers looking to invest in BTL properties before the new changes come into play in April.