14th
May 2017
Since the government's announcement was made in last November about the banning of letting agents' fees, the monthly number of landlords leaving the private rented sector has been steadily increasing.
An association of letting agents claims that their members told them for March on average for each branch four landlords were selling their properties, in February the average monthly was three per branch
It is no coincidence that the last time the monthly number of landlords leaving the market per branch was above three, occurred in November when the banning of fees was announced. The association believes that the private rented sector is not being seen as such a worthwhile investment as it was before all of the anti-landlord legislation coupled with the tax changes came into force.
In the March report it highlighted an increase of members saying that they had tenants negotiating rent reductions which was 3.6% a significant increase from February of 2.2%. However a quarter of lettings agents reported that their clients/landlords had in fact increased rents during March.
Although it may seem a positive that 25% reported an increase of rents this has remained stable since January, and when compared with March's 2016 figures of numbers of landlords increasing rents stood at 32%, a reduction of 7% over the last twelve months.
There has been no fluctuation of rental properties' availability for both February and March with the same average per branch of 183; this is 8% higher than in March 2016 when the average was 169.
The March report also showed that their member's branches had 36 prospective tenants each, whereas in February it was 34.
David Cox, chief executive of the association, said: "It’s concerning that, despite supply increasing over last year, stock failed to return to the market after dipping in February. When we also consider that this is coupled with a rise in the number of landlords selling their buy to let properties, this is bad news for those searching for a rental property".
He added: "The introduction of mortgage interest relief means the market is becoming less and less attractive to investors and it appears some landlords are, as we predicted, choosing to exit the market rather than pay the higher taxes".
He also pointed out that 66% of members are concerned that the Government will introduce even more landlord taxes in 2017, which will only further dampen supply.
David Cox commented:"Following the announcement of the ban on letting agent fees, we expect the situation to only get worse for tenants when inevitably the costs are passed onto tenants through higher rents. However, it’s positive that more tenants are taking action and negotiating rent reductions before the consultation ends and they see their rents increase".
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