A drop in available properties is pushing asking price rents to record highs, Rightmove has reported.
The portal says that available stock has dropped 8.7%, exacerbated by a 19.4% fall in London.
National asking prices for new rents, excluding London, in the third quarter this year are £802.
It is the first time that average asking rents outside London have been over £800.
In London, the average asking price has included down, from £2,000 per month in the second quarter, to £1,992.
Rightmove commercial director Miles Shipside said: “Rental demand is currently outstripping supply in many locations, especially in the capital.
“The exit of more landlords from the buy-to-let market has been due to a raft of different factors.
“What we’re left with is a lack of available homes for tenants looking to find their next place to rent, meaning that when the right kind of property does come along it isn’t sticking around for very long before it’s snapped up.”
I am off the opinion that whilst there are some landlords selling up their BTL portfolio … there have always been landlords liquidating their portfolios.
Look at the stats and talking to many agents around the UK (as is my job) … one of the biggest reasons why there is less stock is tenants are are moving less.
5 years ago, the average length of tenancy was 3 years and 6 months … and now its 3 years and 11 months .. those 5 months don’t sound a lot .. but it means there are 11.4% fewer properties up for rent at any one time .. and as any GCSE Economics student knows .. reduce the supply and price goes up.
The ONS English Housing Survey also shows the number of private rental stock to be growing as well across the UK.
Therefore, as things stand, I have to disagree with Rightmove and their interpretation of the stats .. its not MORE landlords leaving the rental market …. its tenants stay put longer that is driving up the rents … which if you think about it .. will drive up yields .. which will make BTL more attractive .. and in turn attract new money into the industry
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Except ARLA survey shows stock held per agent is reducing. Which is not surprising given fiscal measures. That’s ‘not surprising’ as in ‘predicted’. Unless there is a superfast and massive bonanza of new-build council housing, then those tenants who are marginal, on benefits, etc. will be further priced out of the market. Homelessness is on the rise. Government must understand the private sector is not a replacement for the social sector. ‘And the weak suffer what they must’.
Oh, lest we forget, Shelter were content to have rents rising as a consequence of policies they supported, indeed called for and are STILL calling for.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I expect there are many landlords leaving agents while still renting out their properties themselves. Many agents have priced themselves out of the market – when rents were low in Cambridge I was happy to pay 10% (plus vat) now the money saved form self-management covers many long-distance trips in the unlikely event they are required.
It is now responsible to only consider tenants who are happy to communicate with email and there are many more options for finding tenants without using a high street agent.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Sorry Chris I disagree with you on this one. Whilst the tenants staying put will reduce turn over in supply for agents the reduction in supply is most likely due to the Conservative’s onslaught of landlord bashing and the most significant off all these changes is the reduction/planned removal of tax relief on borrowing. This is because most landlords have built their portfolios on funding; which will costs them much more to maintain. Tenants may stay longer because of the reduction in supply and increases rents due to that reduction in supply, making moving more difficult and expensive to move. I predict tenancies will run longer as the reduction in supply will drive rent increases and many landlords do not make significant increases during a tenancy, encouraging tenants to stay put. Once significant rent increases bite as Government continue to bash landlords and burden them with more and more liabilities/duties increasing their costs these will be passed onto tenants; as would happen in any business model.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I agree completely Will. Like most full time landlords I never increased rents on sitting tenants but I mostly have now due to S24. Some landlords have yet to do so of course but many are exiting. I believe the latest reports say the PRS is contracting by 4500 properties per month so whilst Chris correctly says that there are always landlords liquidating their portfolios, there must now be many, many more doing so.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
JMK I agree completely. I think the confusion can be mistaking reduction in turnover for reduction in supply. Of course landlords liquidating assets has always occurred.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I think the main thrust of Chris argument around tenants staying longer is correct But I must concur with all the other commentators.
It is impossible to ignore the government onslaught on landlords and the inevitable impact that this will have. How much money you make on your investment will always be the primary and defining factor and there can be no question that government is seriously reducing returns through ill considered policy.
Landlords may come and go but who would have believed the decision to leave the sector would be driven by Conservative government policy?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Maybe Rightmove just think rental stock is decreasing as agents are moving their stock away!! Dum Dum DERRR! ha
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Personally, the risk of what the next government may do with the removal of S21 is having more effect on me than tax changes, it has resulted in me not wishing to expand the number of properties we have. In past times, whenever some landlords sold up, other landlords wished to expand, the risk from the promotion of “landlord hating” by the press is making this less likely.
It is landlords expanding that gives developers a safety net to offload new build properties, without this safety net, developers are likely to only “build to order”.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Rightmove are losing property listings as OTM are listing record numbers, rents are increasing due to the leadup to the tenant fee ban agents are increasing the rents and renewing tenancies to collect as much as possible before the ban. Government are making a right ass out of the PRS, over taxing landlords, banning tenant fees and in the budget increasing wages, I can see a lot of redundancies in agencies and many going by the way side, but hey ho at least there’s no increase fuel tax.. and only 2p on beer. Think I’ll turn to drink!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register