The Royal Institution of Chartered Surveyors has given a stark warning about the cumulative effect of the additional homes stamp duty and the change to mortgage interest tax relief on the health of the private rental sector.
It says the lack of listings coming to the lettings market now - indirectly helping keep rents buoyant - mask bigger problems later in 2017.
It says most of the agents who contribute to RICS’ regular market survey suggest their landlord clients will cut back on their portfolios in the next 12 months - and the situation continues into the future. “Over the next three years, 26 per cent more [agents] expect landlords to scale-back their portfolios” it warns.
Simon Rubinsohn, RICS chief economist, says the shortage of stock now and in the longer term will move rents in only one direction: "Not only are the headline price and rent [figures] pointing to further increases over this year, but more significantly, the medium term view of RICS professionals ... is that both house prices and rents will over the medium term grow at a faster pace than wages putting even greater pressure on affordability."
A Your Move survey reported in Letting Agent Today yesterday suggested rents rose in all but two of the regions of England and Wales in 2016, despite a surge in the number of homes to let early last year thanks to the purchase of properties ahead of the imposition of the additional homes stamp duty surcharge.