Alarm bells continue to ring in the buy-to-let sector as the gap between the supply and demand for decent rental housing becomes even wider.
ARLA Propertymark members have reported that more prospective tenants are seeking properties, while stock diminishes. Their figures for April show there were 70 would-be tenants on average for each branch in January, compared to 59 in December. In contrast, supply dropped from 200 to 184 in the same period. The research is based on the response from 361 of its members, who also reported that 19% faced rent increases in January, compared to 16% in December.
ARLA Propertymark chief executive, David Cox, warns that renters are in for a tough 2018, if these figures are an indication of what the year holds. He pointed out that established landlords are being forced out of the market because of increased taxes. This is also putting off people who may have considered entering the sector. Thus, housing stock falls at the same time as the number of tenants increases because they cannot afford to buy a home. He said that tenants will continue to feel the pressure in terms of rent rises and dwindling stock until the buy-to-let market looks like a more attractive proposition for landlords.
These sentiments are backed up by figures from Your Move. Its rental tracker for England and Wales for February shows the annual growth of rents has gone up from 2.3% in December, by another 0.2% to 2.5% in January. The average rent for England and Wales is now £829. The fastest-growing rents are in the North West and East Midlands, which have risen 2.9% annually to an average of £636 and £652 per month, respectively. As expected, London remains the most expensive place for tenants, with average rents of £1,276 a month, although this does actually reflect a decrease of 0.8% annually. The North East remains the cheapest place for tenants in the UK and it had the biggest percentage fall of 2% to £534 a month.
Whilst the government concentrates on trying to increase home ownership, the people it is trying to help are feeling the pinch. Not only are rents increasing, but renters face more competition from fellow tenants for the properties that are available. If rents continue to rise, they will find it even more difficult to save up for a deposit to get on to the property ladder. Instead of penalising landlords with increased taxes and stamp duty, the government should be looking at ways to encourage further investment in the buy-to-let and build-to-let sectors.
Ensure you are being transparent and fair – produce professional inventories, check ins, check outs, interim inspections, building inspections, risk assessments and more with InventoryBase.
Start your free trial here today.