The number of buy to let landlords leaving the private rented sector in the UK is rising, reaching the highest number per month since the lettings fee ban was announced last November.
According to the Association of Residential Letting Agents members are reporting that an average of four landlords per branch are selling up, more than the three per branch recorded in February.
The last time the number of landlords selling their buy to lets rose above three per branch was in November last year, when the letting agent fees ban was announced and ARLA said it is concerned that the PRS is becoming less attractive to property investors.
The March monthly report also shows that the number agents reporting tenants negotiating rent reductions rose month on month to 3.6% from 2.2% in February while 25% of letting agents saw landlords increasing rents in March.
It means that the number increasing rent has not changed since January and year on year, this is down by 7% with 32% seeing rent increases in March 2016.
The supply of rental stock is stable with the number of properties managed per member branch the same as the previous month, with agents managing 183 on average. In March 2016 this figure stood at 169, meaning the supply of rental stock has increased by 8% over the last 12 months.
The data also show that ARLA members had 36 prospective tenants registered per branch, an increase from 34 in February 2017.
‘It’s concerning that, despite supply increasing over last year, stock failed to return to the market after dipping in February. When we also consider that this is coupled with a rise in the number of landlords selling their buy to let properties, this is bad news for those searching for a rental property,’ said David Cox, ARLA chief executive.
‘The introduction of mortgage interest relief means the market is becoming less and less attractive to investors and it appears some landlords are, as we predicted, choosing to exit the market rather than pay the higher taxes,’ he explained.
He also pointed out that 66% of members are concerned that the Government will introduce even more landlord taxes in 2017, which will only further dampen supply.
‘Following the announcement of the ban on letting agent fees, we expect the situation to only get worse for tenants when inevitably the costs are passed onto tenants through higher rents. However, it’s positive that more tenants are taking action and negotiating rent reductions before the consultation ends and they see their rents increase,’ Cox added.
