Government policies aimed at curbing the buy to let market are directly leading to more pressure on the lettings sector, according to a major agent.
Research conducted by Belvoir shows that although 68 per cent of landlords surveyed had not raised their rent in the last 12 months, some 86 per cent believe that increased purchasing costs for investment properties will inevitably lead to increased rents.
“The survey ran from mid December 2015 to mid-January 2016 and we invited all landlords, not just those who are clients of Belvoir, to respond to an on-line questionnaire. We received a total of 1,038 answers and many of these concurred with Belvoir's predictions at the start of this year” explains Belvoir's managing director Dorian Gonsalves.
The majority of landlords who responded to the survey were investment landlords with one to 10 properties, with 93 per cent of these rental properties in England.
“When we asked landlords how changes to stamp duty and taxation were likely to influence their investment plans for the next 12 months, 44 per cent responded by saying they will be adopting a cautious approach to further investment” says Gonsalves.
“A total of 68 per cent of landlords had not increased their rents at all in the last 12 months, and almost half of those surveyed have no plans to increase rents in the next 12 months.”
But ominously, some 88 per cent of landlords believe that increased purchasing costs for investment properties - due to this spring’s rise in stamp duty and the phasing out of some mortgage tax relief for landlords - will ultimately lead to increased rents.
“Landlords are almost equally divided in their views as to whether they think BTL remains a good investment for new people coming into the market. A total of 46 per cent thought it would still be a good investment and 40 per cent thought it would not, with 14 per cent undecided” says Gonsalves.
“The majority of landlords named George Osborne's anti-landlord policies as the single largest challenge that landlords will face in 2016. This is entirely in line with my prediction that Increased government interference in the BTL market will put a real squeeze on the supply of property in the rental market in 2016 and beyond” he says.