The latest analysis of buy to let trends by letting agency franchise chain Belvoir has identified a specific lack of rental stock available in our market towns.
“This is down to a lack of new landlords bringing new stock to the market, which we believe is directly related to recent tax increases such as the three per cent stamp duty [surcharge] on buy to let second homes and changes to the way mortgage interest tax relief is treated, which means some landlords may end up with a higher tax bill than profit” explains Belvoir’s chief operating officer, Dorian Gonsalves.
“As a result of this stock shortage, properties are often rented to the highest bidder, typically the wealthier tenant, which is raising rents beyond the traditional plus or minus four to five per cent trend” he continues.
Elsewhere in Belvoir’s report, based on data from the first quarter of 2017, the agency says that across England, Wales and Scotland, in areas where the company has had a long-standing presence, average rents increased year on year by 5.75 per cent.
They went from £728 in Q1 2016 to £770 in Q1 2017 “although some areas of the South East reported slight falls in rent while other areas such as the East Midlands and Yorkshire saw increases of over seven per cent year on year” says Gonsalves.
On a positive note the number of landlords selling property has fallen since Q2 2016, suggesting that the market is not yet seeing the predicted ‘landlord sell off’ post the new tax increases - “but we are seeing a drop in new landlords entering the market” he says.