6th
Jul 2016
Since the introduction of the new stamp duty surcharge of 3% since April 1st, the percentage of new landlord mortgages has dropped to just 8% of the total market, the lowest since 2010.
The simple explanation is that the New Year’s explosion of frantic buying up of properties by landlords, to escape the stamp duty, when it accounted for 18% of the market. The regions most affected by the drop in activity are the North, Midlands and Wales.
The North East landlords’ purchases in the first three months of this year stood at 29%, however the second quarter saw it drop to just 9%.
Wales enjoyed 19% of homes purchased by landlords in the first three months which dropped to 9% in the second quarter, and it was a similar case in the East Midlands where it was 19% in Q1 down to 8%.
Since the landlords’ frenzied purchasing, more rented properties appeared on the market which is up by nearly a quarter (22%) in June, compared to the corresponding month last year.
The Capital has seen a substantial rise availability of rented ‘homes’ of 33% and the South West has enjoyed the largest increase of 55%.
Rental growth has slowed down because of the increase of new properties and affordability levels in most regions of the UK.
The average rent across the UK for June is 3.6% higher than the same month in the previous year as it stands at £960.
Research director of a UK lettings agent, Johnny Morris, said: “The lull in landlord activity is mostly due to investors bringing forward purchases in the first three months of the year but upcoming changes to mortgage tax relief and the prospect of heightened uncertainty in economy during the lead up to the referendum, will also have made investors warier of entering the market.
He continued: “Those extra homes bought by landlords at the start of the year are still making their way to market. Despite tenant numbers still growing, the increased supply is slowing rental growth.”
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