7th
Aug 2017
There is rising speculation throughout the private rented sector that as landlords are selling up then supply and demand market forces may cause significant rental increases for tenants.
A national Home mover audit reports that there has been a 25% fall in the purchase buy-to-let properties. This of course has been caused by 'The Usual Suspects' of the stamp duty increase and the reduction/phasing out of mortgage interest tax relief; as well as the tougher criteria for BTL lending requiring landlords to have sufficient rental cover and higher deposits, in spite of the government's intentions to cap them.
The report claims that due to these factors there has been a major reduction in buy-to-let property purchases in the last twelve months. The government's plans of making more properties available for first time buyers may backfire on tenants in rented 'homes', as rents could increase because of the fall in PRS housing stock.
Kate Faulkner, founder of a property checklists and design companies, said: ‘It’s interesting to see the impact of the government tax hikes on the landlord market.
"Although it may appear ‘good news’ initially that there are fewer buy-to-let investors, this is likely to back fire on tenants as where there is a shortage of rental properties, rents may rise. However, it’s also likely to hit the economy which is already slowing. A landlord spends thousands checking a property and letting it, supporting all manner of trades and letting experts. A loss of money in this sector will surely impact on earnings, and therefore on economic growth."
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