Homeowners are buying the vast majority of rental properties being offloaded by landlords, reducing local rented supply.
A survey of more than 500 big valuers and surveyors reveals that 90% reported that these properties were typically being sold to buyers who planned to make them their primary residence.
e.surv’s research also shows 79% of surveyors witnessed a drop in landlords planning to buy new investment properties during the last 12 months, while half saw a rise in landlords planning to rationalise their portfolio or exit entirely.
Half of the surveyors also saw an increase in the number of privately rented homes entering the sales market as pressure on landlords mounts.
Outstrip
The demand for rental homes continues to outstrip supply across the UK, with 44% of respondents reporting falls in the stock of rental instructions coming to market.
The survey also finds that properties are being let more quickly and typically at or above the asking price in the most active rental markets; 45% of London-based surveyors reported an increase in rental prices let above the asking price, with 40% seeing the time to let a property shorten.
Pressure
While the number of private landlords exiting the market has not been at the scale some first feared, Rob Owens, head of research at e.surv, says that its analysis shows there is likely to be continued pressure on supply and prices as landlords consider their position.
“The buy-to-let market is facing a number of challenges at present, with rising mortgage rates the biggest concern for landlords,” he adds. “It is important that the government takes steps to support the buy-to-let market and ensure that it remains a viable investment option for landlords.”
Well who’d have thought putting pressure on landlords would make them consider it a good idea to sell?
This is what Shelter, Acorn etc wanted and it’s what they’ve got. I’m not really sure tenants want this kind of outcome. Tenant groups seem to have gone very quiet now the un?intended consequence have come to light.
The only way the gov can support landlords now is to abolish s24 and stop the abolition of s21 .and stop eroding cgt relief .Interest rates are unlikely to begin falling until next year and then only very gradually. After getting my renewal rates for March 24, I saw 0 viability in continuing even if I were able to raise the rents by several hundred pounds a month. I therefore had to serve s21 notices on 2 properties today. Agent advised me there were no investor buyers and that tenants had reached their mx affordability so if I wanted to sell the sooner I issued s21 the better . Even then it is possible that I would have to go through courts if tenants sought to be rehoused by the council. Some tenants still believe that something other than a hostel or b&b awaits them once bailiffs arrive . The abolition of cgt relief means it makes little difference to stagger sales . Agent told me he had many landlords selling and some throwing in towel completely despite a massive tax bill. I am just posting this as a live example of what is going on up and down the country. The true size of what is happening has yet to hit. Only then might the media start reporting why decent landlords have left in droves.
The article should also confirm that new housebuilding will be reduced by owner occupiers buying properties withdrawn from the rental sector, as well as the lack of new investment into new build buy to let.
So the tenants of tomorrow will be imprisoned in high rise student pods beyond their student days, unable to rent or then buy a house due to the supply crisis.