The Association of Residential Lettings Agents says the feared sell-off of private rental units is continuing apace on the eve of the Fees Ban.
In April, letting agents saw the highest number of landlords selling their buy to let properties since May 2018, with the number of landlords exiting the market rising to five per branch, up from four in March.
Meanwhile the number of tenants experiencing rent rises increased in April, with 33 per cent of agents witnessing landlords increasing them, up from 30 per cent in March.
Year-on-year, this figure is up from 24 per cent in April 2017, and 26 per cent in April 2018.
In April this year, the number of tenants successfully negotiating rent reductions fell from 2.9 per cent in March to 1.9 per cent in April. This is the lowest figure seen since May 2016 when it stood at the same.
The number of properties available to rent dropped marginally to 202 per member branch in April, from 203 in March, which was the highest since ARLA’s records began in 2015.
Year-on-year, supply is up 13 per cent, from 179 per branch in April 2018.
Demand from prospective tenants also decreased in April, with the number of house hunters registered per branch falling to 64 on average, compared to 67 in March.
“As predicted, April’s findings have shown an upsurge in the number of landlords selling their buy to let properties. The Tenant Fees Act, coupled with the proposed scrapping of Section 21, is forcing landlords to either increase rents or leave the market altogether” explains David Cox, ARLA Propertymark chief executive.
“As supply of rental accommodation falls further, tenants will only be faced with more competition for properties, pushing up rent prices on good-quality, well-managed properties and decreasing tenants’ ability to negotiate rent reductions. In order to remain profitable, landlords will increase rents to cover the additional fees they are now faced with and as a result, tenants will continue to feel the burn.”
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“As predicted, April’s findings have shown an upsurge in the number of landlords selling their buy to let properties. The Tenant Fees Act, coupled with the proposed scrapping of Section 21, is forcing landlords to either increase rents or leave the market altogether” explains David Cox, ARLA Propertymark chief executive.
The government is quite happy with this sell-off.
They'll get their hands on some serious tax money with the Capital Gains Tax to be paid, rather than the smaller amounts coming to them annually.
The price of property will sink somewhat in the sell-off and those who buy whether residents or larger corporations that will take over the PRS will set it on a more 'professional' basis and charge accordingly.
It would be interesting to know who is buying all these ex-rental properties.
I doubt many of them are FTB as there has always been sufficient properties to buy so bringing more stock to market doesn't provide a catalyst for FTB to buy
I strongly suspect it is cash rich LL who don't have to concern themselves with anything so bothersome as a mortgage.
Then there are the downsizers.
The average ex-rental property tends to be a two bed which for most downsizers is ideal.
Of course there will be a certain percentage of properties NOT purchased by cash rich LL which begs the question as to where the former tenants go!?
None of the tenants will magically convert themselves into FTB like the GR and Shelter idiots believe.
So who is buying all this ex-rental stock?
Have been selling in the south to other B2L investors via mortgages.
Interesting I presume these investors are buying via companies!?
Or if not are these buyers aware of S24?
It just strikes me as bizarre that investors are now prepared to pay large SDLT due to the surcharge.
There is no way I would invest with such high SDLT.
Not so much CGT but more like the Stamp Duty rip off so called tax.
Not companies not 40% tax payers, just looking for up wards of 6% yields.
Not just renting to students who still prefer units not in large blocks of student accomodation. Foreign tenants Romania Polish still very popular.
Beware of romania polish tenants. Been bitten very badly. Rented to family and he bring in taxi drivers and pile them all 7/8 of them into a 4 bedroom residential rental house. Then one of them called the council who then sue us!!! Utterly outrageous. I often visited the house to collect rent in cash as he doesnt want to pay into my account via standing order. Always a big bunch of big men and when asked was told they are his friends dropping by for coffee.
Interesting that these buyers consider such yields are achievable down south.
Perhaps they are able to supply large deposits to mitigate the effects of S24.
Still interesting that there seems to be a swapping of property between LL.
Possibly the LL having to sell because of S24 etc are just changing LL so tenants shouldn't notice much difference
Never had a problem over 11 years with them now.
be careful with the long term tenants now that s 21 is scrapped. It is very very difficult to get the property back unless you are going to move back in. If you intend to sell, there are certain laws that says that they have first dips on purchasing the house and also i think you have to sell at lower price to them if i heard correctly from another landlord.
Yep on principle I would never take on any Romanian.
Polish a bit iffy as well.
RGI difficult to obtain on such tenants.
I could say Worse about some English tenants. every nation produces shit!
You are of course TOTALLY correct.
My discrimination is against ANY tenant that can't qualify for RGI.
Never met an immigrant yet apart from a Swiss national who could qualify for RGI.
Had to decline him as he wanted to use his own furniture for a year tenancy and I had nowhere to store mine.
But you do hear stories about EU nationals inviting all and sundry into a rental property.
There isn't much a LL can do about this short of camping out on the property doorstep!
The point here is that LL will just become more selective in light of the continuing dysfunctional eviction process.
This to be made even more so with potential S21 abolition.
So if I can't source new tenants as required with RGI possible I will just sell each property.
No way will I allow the eviction process to rip me off again.
pardon my ignorance, whats rgi stand for?
Nope you aren't ignorant just my lazy use of jargon.
RGI
Rent Guarantee Insurance
Not to be confused with LA guarantee which guarantees nothing.
RGI is very hard for tenants to achieve.
Not surprising really when my RGI claim cost £10000 for an £89 annual premium
Value or what!!!
Sell with tenants in not a problem
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