16th
Nov 2016
A national lettings agency franchise is extremely positive about the PRS in spite of the doom and gloom mongering predicted by Brexit and the onerous stamp duty increase.
However Dorian Gonsalves, the franchising lettings agency's chief operating officer, is concerned that this could all change if the government refuses to change its plans in reducing the mortgage interest relief as a business expense from next April. He is calling for the government to introduce new measures that will help the buy-to-let sector.
Dorian Gonsalves said: “If there is no reversal in government policy with regards to mortgage relief taxation, and no measures are introduced to increase the supply of rental properties then landlords are likely to come under increasing pressure to raise rents."
He continued by saying: “If they [landlords] subsequently start selling off properties, this will clearly have a negative effect on the availability of good quality accommodation. We await the chancellor’s Autumn Statement on 23rd November with great interest.”
The agency reports that in Q3 that rents slightly increased and there could be opportunities to rise further. Nearly 90% of the their franchise owners were experiencing an increase in demand for houses and 63.5% for flats. However there is very little likelihood of any rent increases up to and over the Christmas period.
Gonsalves said: “Historically Q2 and Q3 tend to show an increase and Q4 tends to be when there might be a decrease, as landlords don’t want properties to be left vacant at this time of year and so it is an opportunity for tenants to pick up a bargain.
“Two to three bedroom houses remain top of the list for stock shortages, with 81% of offices reporting a shortage of three-bed semi-terraced houses, 68% reporting a shortage of three-bed detached homes and 66.5% of offices reporting a shortage of two-bed houses.”
He finished by saying that:“Our analysis of rental periods in Q3 versus Q2, showed that almost half of franchise owners [46.3%] reported that the average time for tenants to rent was 13-18 months, and over a quarter [27.78%] reported the average time in a rental property was over two years.”
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