Connells Group says a growing number of small-scale landlords are likely to quit because of the tax and regulation red tape engulfing the private rental sector - and warns that the fees ban in 2019 may unsettle the market.
Group chief executive David Livesey, in his overview of the company’s performance in the second quarter of 2018, says: “Whilst still not a significant feature, we continue to see a gradual uplift in the number of smaller landlords moving away from the market as the full implications of legislative and tax regime changes are understood.
“A point which will become more topical over the coming months is the impending ban on lettings fees being charged to tenants. This may potentially create some market distortions.”
Livesey says that overall the lettings market continues to deliver “a steady performance” in the second quarter of this year, albeit below the level of the same period in 2017.
“After seeing some improvement in stock levels in recent quarters, we have seen the number of properties available for rent reduce during Q2, with seven per cent less stock available at the end of June compared to the end of March 2018” he notes.
This reduction in available stock, coupled with the continued increase in the average length of tenancies - currently averaging 22 months - may drive an increase in average rents in the coming quarter, he predicts.
Average rents in the second quarter of this year were one per cent more than 2017.