Activity in the rental market has slowed since the Government announced the earlier-than-expected launch of Help to Buy.
The second phase of the scheme, which had been due to launch in January, has had a “marked” effect, the Royal Institution of Chartered Surveyors reported this morning.
It said that at a national level: “Tenant demand and new landlords’ instructions … have almost ground to a halt.”
In London, the RICS said, both demand and new instructions were falling.
However, the RICS said that the slowdown in lettings has not yet fed through to rent expectations. RICS agents are still expecting rents to increase by about 2% over the next year and by about 4% per year over the next five years.
Agents responding to the RICS survey vary noticeably in their comments about the lettings market, with many still seeing it as busy and with demand exceeding supply.
However, it is not hard to find comments which give a very different picture. In East Anglia, one agent (John B Shrive) notes: “More ‘To Let’ boards by other agents than in living memory.”
In the south-east, Austin & Wyatt says: “Help to Buy has impacted the number of professional tenant couples.”
In London, Jeremy Leaf notes: “Help to Buy and competitive mortgage rates are continuing to tempt aspiring first-time buyers to purchase and not rent.”
Separately, the Council of Mortgage Lenders is forecasting better first-time buyer numbers for next year. However, it also believes that there will be more lending to buy-to-let landlords.
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Comments
There will inevitably be an initial short term fall off in demand for smaller rental properties as younger buyers take advantage of the Government scheme. However, as house prices rise because of the scheme, prospective purchasers will soon be priced out of the market again and rental demand will pick up again.
oooops, sorry about that, pressed the button twice!
What a load of drivel from RICS. The PRS has some 4,000,000 properties in the UK and we have a shortage of at least 1,000,000 homes. Help to Buy is facilitating 70 sales per day at best, this won’t even register in terms of market changes.
The PRS is set for substantial growth for at least the next 10 years. For those with the drive and savvy the opportunities are better than ever.
What a load of drivel from RICS. The PRS has some 4,000,000 properties in the UK and we have a shortage of at least 1,000,000 homes. Help to Buy is facilitating 70 sales per day at best, this won’t even register in terms of market changes.
The PRS is set for substantial growth for at least the next 10 years. For those with the drive and savvy the opportunities are better than ever.
The sign companies have largly survived during the crash to due to the upsurge in lettings, if this dies off coupled with the low numbers of houses going to market at the moment the price of for sale signs will have to double just for them to break even. I laugh at them when they ask for an increase but I am now thinking these parasites will now be even more of a drain on my income.
Since when did the RICS know anything about rental values?
Stick to surveying and leave the rest to the professionals.
Yeah true its certainly having an effect. The cheap rough little ones beds are letting but those expensive 1 beds are certainly hanging around for much much longer than usual. Fair dos i guess, why pay all that rent when you can buy with just 5%
They do lettings out of London... who'd have thought it!
SWT, you're right. Its always been that way and it probably always will.
I spent some time in London in the summer, and in terms of economic activity it wasn't even in another world. It was in different galaxy altogether.
I think it is inevitable that those FTB's in the position to take advantage of the HTB scheme will see this perhaps as their only opportunity and this will affect demand in the PRS over the short term. The number of 'reluctant 'landlords coming to market will also decrease as they attempt to sell. They have, after all, been waiting some years now for the selling market to become more vibrant.
Letting agents have had it more or less their own way the last 4/5 years so perhaps it is time there was a rebalancing. Long term the need for the PRS is clear and the future I am sure is good but we will notice a decrease in activity through 2014 I feel.
When will people realise that what is happening in London is not necesarrily happening elsewhere? From where I am sitting (Midlands and southwest) demand has continued to increase!