Is this the 'Calm before the buy-to-let storm'?

Is this the 'Calm before the buy-to-let storm'?

According to a new report from the Association of Residential Letting Agents, a seasonal lull kicked in as the supply of available rental properties dropped, alongside falling demand.

ARLA agents registered an average of 29 prospective new tenants last month, down from 34 in November – a decrease of 15 per cent. Supply also decreased marginally in December, with an average of 182 properties managed per branch, down from 189 in November. Those looking for rental properties in the capital continue to struggle, with an average of just 108 properties managed per branch, 43 per cent less than the national average.

Cost of renting

Alongside supply and demand, the number of tenants seeing rent hikes also dropped in December, with only two in ten (18 per cent) ARLA letting agents reporting a growth in rent – a drop of five percentage points from November and the lowest reported in 2015.

David Cox, managing director, Association of Residential Letting Agents (ARLA) says: “As we’d expect in December, the UK saw a lull in activity, with people putting off any moves until January. The supply of housing stock was down, and fewer tenants were on the hunt for new properties. It’s reassuring to see the number of agents reporting rent increases is still on the decline – some encouraging news for tenants as we start 2016.”


Buy-to-let market changes

The stamp duty reforms to buy-to-let properties announced in the Autumn Statement are causing concern amongst ARLA letting agents. Two in three (62 per cent) agents predict the changes from April will push up rent costs, and a further two thirds (65 per cent) predict the new reforms will push landlords out of the market after April, and decrease supply.

However, the announcement is having an immediate effect on landlords, as a quarter (24 per cent) of agents have seen uplift in interest from buyers looking to invest in BTL properties before the new changes come into play in April.

David Cox continues: “With supply, demand and the number of agents reporting rent increases all declining in December, this could well be the calm before the buy-to-let storm. Buy-to-let landlords determined to complete purchases before the changes come into force in April are storming the UK housing market, meaning the lull we’d usually see is less significant. But subsequently, after April, we’re very likely to see the number of buy-to-let properties on the market begin to decrease, and this will most certainly have a detrimental effect on renters across the country.”

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Latest Comments

SecomTech
SecomTech 22 Jun 2017

AT Last...This was discussed years ago and there was a move towards landlords registering their bad tenants on a database..(can't remember where) It seems a logical step though our leaders will probably...

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Bertrand
Bertrand 02 Jun 2017

How about the Welsh Govt introducing a scheme to protect landlords against "rogue" tenants who are then taken to court for criminal damage to the properties they trash. Pretty unlikely I suspect and politically...

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AmberMorris
AmberMorris 25 May 2017

"Please don't pick a novelty tune-playing doorbell. They're not 'fun'. They're stupid." Laughed a lot to this. It's actually true, though.

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Oliver Conway
Oliver Conway 18 May 2017

Making a neat inventory is a good idea, but if the seller is not willing to provide it, can the buyer demand it?

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Bertrand
Bertrand 17 May 2017

First step to nationalisation of the private rented sector IMHO. Nanny state poking their noses into things yet again. I object, as a decent landlord, sometimes having to deal with some pretty awful tenants,...

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Izzy
Izzy 16 May 2017

This is such a great a post. I love the detail you've gone into. It's a very useful article for helping those who are looking at deciding which sector they would like to go into! When I first started investing...

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paul burnham
paul burnham 30 Apr 2017

Jeremy Corbyn's pledge that a Labour government would build 500,000 new council houses must electrify the general election campaign. Reliance on markets and the profit motive has brought huge housing-related...

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CommercialTrust
CommercialTrust 28 Apr 2017

Sadiq Khan?s announcement of an online database of landlords and letting agents who have been convicted of housing offences, appears on face value to be a variation of the already implemented Database

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warren
warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

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Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

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Tony Gimple
Tony Gimple 14 Apr 2017

I'm not at all surprised that so many landlords are still confused about what the tax changes really mean and how it will affect them. In particular, the blind rush to incorporation is leaving landlords...

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MH
MH 13 Apr 2017

You are right that the bank holidays are going to be spoiled in looking for the properties. But people who want to sell their property and looking for the better relocation, they can get benefits of this...

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