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

Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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