Some 40% of key towns and cities across the UK experienced falls in new rental properties being listed in September compared to the previous month, new research shows.
There are signs that it is due to landlords being affected by changes in the buy to let sector as eight out of 10 locations which saw a decline in new rental listings in August also did so in September.
The study from property crowdfunding platform Property Partner analysed data for 89 towns and cities in September and compared the results with figures from August.
Grimsby, which fared better in August with a relatively small drop of 5.15% in new rental listings, was the worst hit last month with a fall of 26% and no part of the UK was unaffected by a shortage in supply.
Oxford saw new rental listings fall by 23.9%, Canterbury by 23.9% and Brighton by 18.7% while London saw new rental property listings up only marginally by 1.43% in September, but a considerable improvement from August when the supply of new rentals dropped by 16.4%. Meanwhile, in Manchester and Birmingham, new rentals fell 13.04% and 13.69% respectively.
The towns least affected included Cambridge with new rentals down 0.89% month on month, Glasgow down 1.34%, Worthing down by 1.68%, Sheffield down by 1.76%, York down by 1.83% and Exeter down by 2.29%.
According to Dan Gandesha, chief executive officer of Property Partner, while a seasonal drop off might be expected, the number of new buy to let properties coming onto the market is worryingly low.
‘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,’ he said.
He pointed out that the Royal Institution of Chartered Surveyors (RICS) has already warned of a critical rental shortage. He believes the sector is being affected by tax changes which are making traditional landlords think twice about 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,’ he explained.
‘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,’ he added.
