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Private rented sector slows in first quarter – Kent Reliance

  • 15/06/2018
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Private rented sector slows in first quarter – Kent Reliance
Growth in the private rental sector has slowed, thanks to government intervention and economic uncertainty, according to research.

The value of the private rented sector in the UK stood at £1.4trn in the first three months of 2018, the same as the previous quarter, Kent Reliance’s report showed.

The slowdown is down to the combined effects of higher stamp duty costs, tax reforms and tighter lending rules, the research suggested.

The number of households in the sector increased by 3% in the last year to 5.7m, far slower than the rate of increase seen over the past decade.

At the same time, 1% more landlords increased, rather than shrunk their portfolios, in the last three months, according to the survey, run in association with BDRC Continental.

Tenant demand has eased too, with more landlords reporting a fall than a rise.

However, first-time buyer activity is still a long way from recovering to its pre-recession levels, despite a raft of government support measures.

This has contributed to the long-term growth of the private rental sector and is set to do so in the future.

Andy Golding, chief executive of OneSavings Bank, said: “Landlords were left reeling after the introduction of tighter regulation and higher taxes, while the spectre of Brexit is already weighing on the housing market.

“This has naturally deterred investment into the private rented sector, especially from amateur speculators.

“Political opinion may be set against the PRS, but without it, the housing crisis would be deeper still.

“First-time buyer numbers, despite recent fanfare, are a long way from pre-recession levels and with household numbers growing, and new housing starts inadequate, it is the PRS that will continue to pick up the slack.

“Policy should recognise that, and support growth in supply across all tenures.

“A housing market with dwindling supply of rental accommodation yet growing demand would, without a significant rise in affordable housing, provide the worst of all worlds for tenants: higher rents, with less choice and security, hampering their ability to save to buy a home.”

Kent Reliance’s data also showed landlords are increasingly operating as a business, and those buying property are increasingly doing so as a limited company, allowing them to continue to offset mortgage interest costs against tax.

In the first quarter of 2018, 72% of mortgage applications for purchase were via a limited company – more than twice the level seen two years ago, and up slightly from 70% in 2017.

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