Letting agents across the UK have seen a further decline in new landlord instructions, as more buy-to-let investors leave the rental market, with some citing concerns about increased regulations, and reduced flexibility in managing their properties.
The latest report from RICS reveals a net balance of -26% moving deeper into negative territory from -19%. Looking ahead, the near-term rent expectations net balance of +25% suggests further rental price rises over the next three months owing in part to the widening supply-demand imbalance in the rental sector.
RICS chief economist, Simon Rubinsohn, described the negative feedback in the survey as “problematic”.
He added: “With demand continuing to grow, there appears little relief in store for tenants in terms of the upward pressure on rents. Critically, even with the rise in the build to rent to sector the shortall of affordable rental stock looks set to remain substantial.”
According to RICS, tenant demand increased in the three months to April, with a net balance of +14% of respondents (part of the quarterly seasonally adjusted rental market dataset). This represents a slightly stronger demand trend compared to the mostly flat picture seen in the previous quarter (net balance was +3% in the three months to January).
“The unintended consequences of the Renters Rights Bill are becoming more apparent as supply gets tighter,” said Tom Bill, head of UK residential research at Knight Frank. “A piece of legislation designed to protect tenants may ultimately push rents higher as some landlords decide to sell.”
“Together with tougher green regulations and higher mortgage costs, it means the choice for tenants is narrowing,” he added.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, commented: “Over the past month or so, we have noticed considerably more tenant interest but a resistance to paying higher rents. However, lack of supply, particularly of one and two bedroom flats in more popular areas, often prompted by landlords deciding not to renew, is preventing a more marked downturn in values.
“Looking forward, we do not expect much improvement in stock shortages, particularly as the Renters’ Rights Bill nears the statute book so the imbalance with demand is likely to continue.’
Buyer interest and sales activity decline following stamp duty changes
“ Looking forward, we do not expect much improvement in stock shortages, particularly as the Renters’ Rights Bill nears the statute book so the imbalance with demand is likely to continue.’
Replace “continue” with “increase dramatically”
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In 25 years, our agency has had to apply to the courts on just 3 occasions for possession orders up until January this year. Since then we have submitted 3 to the courts, all because tenants are unable to find properties after notice expired.
Usual advice from council to stay put and wait for possession order doesn’t help anyone.
3 good tenants will be homeless as good landlords decide that selling up is the best option. None of the properties will go to first time buyers due to prices.
Well done government!
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Well surprise surprise! Where’s Cilla when you need her?
Everybody in the industry knew this would happen, another classic example of a government acting before considering the knock on effects.
Their attempts to woo the tenants has and will continue to work against the very people they are trying to woo!
The PRS is in all sorts of problems and these will only get worse.
Just the same as the NI hikes for businesses along with the rise in the living wage.
“these hikes in NI will not affect the workers, the bill will be picked up by the employers”!!
Redundancies, cut backs, closures, no of course it won’t affect the workers!!!
Well done Government!
The lunatics are in charge of the asylum, I wouldn’t let them run my bath!
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However, there will still be propaganda machines like Shelter who will blame it on the greedy landlords choosing to sell their property rather than pay the extra costs for various compliance and legislative hoops to jump through, little of which actually makes any difference! How DARE the nasty Landlord not keep hold of a depreciating asset with an increasing annual cost and lower returns?
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