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Spike in Landlords Leaving Rental Market as Tenant Fees Ban Approaches
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
There has been a spike in landlords exiting the rental market, according to the 2019 April Private Rented Sector (PRS) Report from ARLA Propertymark.
On top of this, the number of tenants experiencing rent increases has risen and the number of tenants negotiating rent reductions has fallen.
The following information has been revealed in ARLA Propertymark’s report:
Landlords selling their buy-to-let
The report shows that:
- During April the highest number of landlords selling their buy-to-let properties was seen by letting agents since May 2018
- The number of landlords leaving the market has risen to five per branch, which is up from four in March
Changes to rent prices
Rent prices have also been affected:
- The number of tenants experiencing increasing rents rose in April. 33% of agents witnessed landlords increasing them, up from 30% in March
- Year-on-year, this figure is up from 24% in April 2017 and 26% in April 2018
- During April, there was a decline in the number of successful rent negotiations made by tenants. They fell from 2.9% in March to 1.9% in April. This figure is at its lowest since May 2016 when it stood at the same
Rental stock – supply and demand from tenants
Leading up to the tenant fees ban, there has been a shift in property supply and demand:
- The number of available lets has dropped marginally to 202 per member branch in April, from 203 in March – the highest since records began in 2015
- Supply is up year-on-year by 13%, from 179 per branch in April 2018
- There has also been a decrease in demand from prospective tenants in April. The number of house hunters registered per branch has fallen to an average of 64, compared to 67 in March
David Cox, ARLA Propertymark Chief Executive, has commented: “As predicted, April’s findings have shown an upsurge in the number of landlords selling their buy-to-let properties.
“In just a few days’ time, on the 1st June, the Tenant Fees Act will come into force in England. This, coupled with the proposed scrapping of Section 21, is forcing landlords to either increase rents or leave the market altogether.
“As supply of rental accommodation falls further, tenants will only be faced with more competition for properties, pushing up rent prices on good-quality, well-managed properties and decreasing tenants’ ability to negotiate rent reductions. In order to remain profitable, landlords will increase rents to cover the additional fees they are now faced with and as a result, tenants will continue to feel the burn.”
