Uncertainty prompted by new legislation and doubts over Brexit has seen housing demand fall and buy to let landlords flee the market, says ARLA Propertymark, the trade body for letting agents.
In a wide-ranging review of the lettings industry over the past 12 months, ARLA data shows:
- The number of letting properties managed by a letting agency branch has dropped slightly from 189 to 187 in 2018
- The number of landlords selling rental homes was up from three to four a branch, spiking at five in the spring – the most since 2015
- Landlords hiked rents for 28% of tenants – up from 25% last year
- The number of tenants seeking to rent was up to 79 a branch from 68 last year
“The number of landlords exiting the rental market is rising, and those who aren’t worried about it yet, should be,” said David Cox, ARLA’s chief executive.
“Buy-to-let investors have faced a huge amount of legislative change over the last 18 months alone, and as costs rise, they are being driven out of the market and new ones are being deterred from entering.
“The Government is developing a joined-up approach for legislating the private rented sector, but until this has been put into action and the market is made more attractive for landlords, rents will continue to rise, competition will intensify, and tenants will continue to suffer.”
Landlords have faced several crippling tax changes in recent years – and more is to come as mortgage interest relief is phased out for higher earners.
Changes in capital gains tax rules and rates of stamp duty have also hit investors hard, while the house in multiple occupation regulations in England means 160,000 extra homes need licensing.