Shrinking property supply pushes up rents – and tenant arrears climb

Shrinking property supply is pushing up rents, with rents dropping in only one region – the south-west, where they dipped 2.2% in July.

Your Move said that everywhere else rents rose, with the average rent across England and Wales standing at £874 during the month – 3.1% up on a year ago.

It said that a decline in the number of rental properties on the market was the result of the Government’s hike in Stamp Duty on the purchase of buy-to-let properties, plus tax changes which are now being phased in.

Despite the rise in rents, landlords’ yields remained flat, averaging 4.7%.

Increased rents also helped squeeze tenants, with 13.7% in rent arrears, well above the 7% recorded in June.

Your Move also noted that tenants who had chosen to live in London suburbs because of rents being cheaper there than in central London are now being hit by rapidly rising travel costs.

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10 Comments

  1. jeremy1960

    The phrase “you reap what you sow” springs to mind. Anyone who ever thought that punishment worked over encouragement should hang their heads in shame-  Osborne and shelter should be hanging their heads very low right now and current government need to grow some b***s and throw out all these ridiculous schemes and start again. Start by encouraging private landlords and stop punishing us and our agents!

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    1. Mark Connelly

      It will be a cold day in hell before Osborne ever hangs his head in shame.

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  2. Will

    Although purporting to be a tax on landlords (ie the perceived rich) it is and has been a tax on the poor via the back door.

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  3. LandlordsandLetting

    Well how many times was this result predicted by property industry professionals? The only people who didn’t seem to see it coming was the idiot Chancellor Boy George and his merry men and women.

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  4. Scottish_Mist42

    The bottom line is that both UK and Scottish Governments want to squeeze the ‘small’ landlords out of the market.  They view the small guy as hard to manage and legislation (in their opinion) has failed, therefore they are now tying to tax them out.

    It’s my opinion they want to replace them with the institutional build to rent investor as they view these as easier to manage and to get them to do what they want.

    The biggest problem with this is landlords are leaving the sector more quickly than they are building.

    It is complete nonsense by both UK and devolved governments.

     

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    1. JMK

      I disagree.  It is all about tax take.  The Government is bankrupt and saw property as an easy target.  When they’ve finished milking this industry they’ll move on to another.

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  5. GeorgeHammond78

    I thought the more eye-popping stat in this article is Your Move’s Arrears rate; nearly 14%. Why do self respecting landlords even use corporate agents? They get little or no real value for money, have to deal with different people in different geographical parts of the network, get tucked up with sly contractor add-ons, poor quality repairs/maintenance, get ripped for every ‘extra’ imaginable and on top of all that run a 1 in 7 chance of not receiving any rent. Blimey, no wonder landlords are exiting stage left.

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  6. CountryLass

    There are some occasions where my arrears list looks a bit high, but most of those are when the tenants rent is due on, say, 27th of the month, but they get paid on 30th/31st/1st. So technically they are in arrears for a couple of days, but the standing order comes in on 30/31/1 so its not worth auctioning them as arrears…

    I think I’ve probably got about 4-5 arrears on a managed database of 146 properties…

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    1. jeremy1960

      Using that basis which I think everyone does, arrears are not arrears if tenants routinely pay a couple of days late to fit in with payday, I can Confidently say that at our office Belvoir Christchurch we have zero arrears on c150 managed properties. Everything is handled in our office with no “farming out” and we know our clients.

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      1. CountryLass

        It’s the best way to do it, keep everything to a small group of people who all know what is happening.

        I deal with rent arrears at my office, and there are three properties that have ‘proper’ arrears from where they have hit a rough patch and fallen a bit behind, but payment plans are put into place as soon as possible (with the Landlords permission) and monitored to make sure that extra payments are made.

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