You are here: Home - News -

Rise in number of landlords selling up

by: Joanna Faith
  • 25/04/2017
  • 0
The number of landlords exiting the buy-to-let market rose in March, according to a survey of letting agents.

The Association of Residential letting Agents (ARLA) said an average of four landlords sold up per branch, compared to three in February.

The last time the number of landlords selling their buy-to-let property rose above three per branch was in November last year, when the proposed ban on letting agent fees was announced.

The government is currently consulting on banning unfair letting agent fees to create more competition in the rental market.

In terms of rent prices, letting agents reported a month-on-month rise in the number of tenants successfully negotiating a price decrease. In February 2.2% of agents witnessed successful rent cuts, while in March the figure rose to 3.6%.

However, a quarter of agents saw landlords increase rents in March, a figure which has not changed since January. This is down seven percentage points compared with March 2016 when almost a third of agents saw rent increases.

The supply of rental stock remained stable in March, with agents managing 183 properties per branch on average.

Demand from tenants, meanwhile, rose slightly to 36 prospective tenants registering per branch in March versus 34 in February.

David Cox of ARLA, 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.”

Cox said the changes to mortgage interest tax relief, which came into force earlier this month, make the market less attractive to investors.

Under new rules being gradually phased in by 2020, landlords will no longer be able to deduct their mortgage interest before calculating how much income tax is payable.

“It appears some landlords are, as we predicted, choosing to exit the market rather than pay higher taxes,” said Cox.

Two thirds of letting agents quizzed said they were concerned the government will introduce more landlord taxes in 2017, which will dampen supply further.

Cox said: “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.”

There are 2 Comment(s)

2 responses to “Rise in number of landlords selling up”

  1. Colin Cloy says:

    The number of landlords exiting the buy-to-let market rose in March, according to a survey of letting agents. This is really good news for first time buyers but it is only the “tip of the iceberg” as each year for the next 4 year or 5 years we will see more and more landlords selling up especially when interest rates start to rise. By 2020/1 house prices should become affordable again for many hundreds of thousands of FTBs.
    It must be the aim of any incoming government hopefully Tory, that the mortgage tax subsidy on BTL mortgages should also be withdrawn for professional landlords. This will save the taxpayer and the Exchequer a further £5 billion a year to spend on more deserving causes or reduce the national debt!

  2. dougie says:

    I’m not sure if a 3 bed ex-council flat in a 13 floor tower block in central London currently selling for £650,000 will still be of interest to a FTB if the price over the next 3-4 years falls to £500,000 or even £300,000.
    I have Landlords refinancing unencumbered property in London and raising £600,000 to get deposits on 35-40 £35,000 to £70,000 properties in Manchester, Liverpool Newcastle (yes properties can be found for £25,00 to £39,995 in Durham for cash sales or Together mortgages with no stamp duty) I think Colin’s dream of normal customers buying a property can happen now in 70% of the UK. Just not in the south East or certain postcodes in middle England. This is unlikely to change unless prices fall to 1980’s level. We would have more in common with Greece at that stage rather than Germany were many people don’t buy but rent but on 10 year tenancies rather than 6-12 months.

Leave a Reply

You may also be interested in