The study identified 89 UK towns and cities, analysing the number of new rental properties being advertised between 1st September and 28th September, and then comparing it to the same period in August.
Researchers at Property Partner found that of the 36 towns and cities, which saw a decrease in rental supply in September, 80% (29) of those also experienced a decline in August.
Grimsby, which fared better in August with a relatively small drop (-5.15%) in new rental listings, was the worst hit last month (a fall of -26%). The next three locations were in the South East – Oxford (-24.4%), Canterbury (-23.9%) and Brighton (-18.7%) but no region or nation was unaffected by the shortage in supply of new buy-to-let properties.
Of the major English cities, London saw new rental property listings up only marginally by 1.43% in September – although a considerable improvement from August when the supply of new buy-to-lets dropped by 16.4%. Meanwhile, in Manchester and Birmingham, new rental ads fell 13.04% and 13.69% respectively.
Dan Gandesha, CEO of Property Partner, comments: "You’d expect a seasonal drop off in the number of new buy-to-let properties coming onto the market during August but September has also proved worryingly slow. We’ll have to wait until next month to determine whether this is just a short-term problem or something to be increasingly concerned about.
The new stamp duty hike in April for buy-to-let and second homes saw a rush by landlords to beat the deadline with a subsequent rise in stock levels. But now that the dust has settled, we’re seeing some significant declines in new listings, particularly surprising after the Summer. Earlier this month, the Royal Institution of Chartered Surveyors (RICS) warned of a critical rental shortage. Traditional landlords have been given a proverbial cold bath with recent tax change announcements. The hike in the stamp duty surcharge in April has certainly discouraged landlords from increasing their rental portfolios.
Alongside tougher lending criteria and cuts to mortgage interest tax relief starting next year, many landlords will be now doubting if it’s worth the hassle, particularly in the South East. Profits have been hit hard and those landlords that decide to stick with it, may just be forced to push up rents - not a promising prospect for tenants.
Like RICs, we believe Britain should be building more homes across all tenure types. Over the past decade, more and more people have moved away from home ownership and become long-term renters. It’s time for the new government to make build-to-rent a key priority, encouraging the private sector to build properties for residential letting with incentives for institutional and ‘professional’ landlords.”
