War on Landlords causes BTL sales collapse

War on Landlords causes BTL sales collapse
The government is making a conscious decision to put landlords on the block for a property market that isn’t working for first time buyers or Generation Rent

According to one of the UK's largets independant estate agents, the scale of decline in buy to let in just twelve months is deeply worrying - with many landlords clearly pulling out of the market and are unlikely to return.

The latest report from haart revealed that house prices across England and Wales in November rose by 0.5% on the month, however they are down by 1.7% on the year with the average house price now sitting at £228,635.

New buyer demand for homes fell by 6.3% in November, and continues to be down significantly on the year, by 21.3% annually. Additionally, the number of properties coming onto the market has fallen by 5.5% on the month and by 8.4% on the year. With a decrease in stock the number of buyers chasing each property has risen slightly, as there are now nine buyers for every new property on the market across England and Wales.

The market has become more efficient this month, as the number of transactions has decreased by 3.6%, and the number of viewings have decreased by a further 5.9%, meaning that buyers are choosing to look at fewer properties before they buy.

The average purchase price for first-time-buyers has fallen this month by 2.8%, and is down by 5.9% annually. This comes as the rate at which first-time-buyers enter the market falls by 6% on the month and by a massive 30.9% on the year.

Despite a fall in the average purchase price, the amount first-time-buyers are paying for a deposit has risen by 1.6% on the month and by 1.1% on the year.

The average property price in London has risen again this month, by 6.2%, pushing up annual growth to 9.4%. This contrasts with the -1.7% annual growth seen across the rest of the country. However, price increases in London come as demand for properties falls on the month by 6.7%, and is down 38.9% on the year. At the same time, the number of properties for sale has decreased by 7.9% on the month, and a huge 28.7% on the year. Sale transactions also continued to drop 1.7% on the month and 24% on the year.

The number of tenants entering the market has fallen by 11% on the month, and by 5.2% annually, decreasing the rate of demand. This has reduced rents marginally, as the average rent now sits at £1,331 across the England and Wales. The fall is less severe in London, where demand is down 2.3% on the month, and by 4% annually. The average rent has fallen, and now sits at £1,871.

The number of Landlords registering to buy increased by 2.2% on the month across England and Wales, but have fallen by 0.9% in London. Figures remain significantly down annually across London by 59.2% and across the whole of the country by 47.7%. Sale prices have remained relatively stable, up 0.7% on the month across the country and down by 0.3% in London, however they remain down on the year across the country. Transactions continue to suffer, down 8.2% on the month and 63.7% annually in London, and by 6% month and 40% annually across England and Wales.


Paul Smith, CEO of haart, the UK’s largest independent estate agent, comments: “The scale of decline in buy to let in just twelve months is deeply worrying - landlords have clearly pulled out of the market and are unlikely to return any time soon.

However this is entirely the result of government policy, with Theresa May now picking up George Osborne’s baton and proceeding to bash landlords with renewed vigour. The end of tax relief on mortgages, the 3% stamp duty surcharge, strict new lending criteria, and now a ban on tenant letting fees that will see the costs passed on to owners, the government’s attack on investors adds up to a ‘War on Landlords’ and a buy to let market crippled by tax hikes and unnecessary regulation. The effect has been to more than halve the number of buy to let sales in England and Wales, and the inevitable consequence will be fewer properties available to renters next year and higher rents.

The government is making a conscious decision to put landlords on the block for a property market that isn’t working for first time buyers or Generation Rent. However rather than chasing investors out of the market altogether, a better solution would be to channel their cash into housebuilding and increasing the supply of rental properties. Tenants are stuck in an intensely competitive market where rents are often more expensive than mortgages, because there are simply not enough properties available for lettings, and many landlords now have no choice but to pass the extra costs on to tenants.

It is time for the government to end this damaging ‘War on Landlords’ and instead create a market that genuinely works for everyone. The government is casting landlords as the pantomime villains of the property market, but we need a more grown-up and serious approach to policy-making, as well as a recognition of the contribution that landlords make.”

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Latest Comments

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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bnellyb
bnellyb 08 Apr 2017

There will be an exodus of private landlords over the next 5 years as tax changes take effect, private landlords provide an important service to the rental market, why do housing associations and councils...

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Fred Cassman
Fred Cassman 07 Apr 2017

"Make it look like you are at home": often people forget this and share on facebook their location!

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jared townsend
jared townsend 05 Apr 2017

It'll be interesting to see how & if the Government's asset sale regarding mortgages helps

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