ARLA Propertymark recently issued its April Private Rented Sector (PRS) Report, which revealed that in April, letting agents saw the highest number of landlords selling their buy-to-let (BTL) properties since records began in 2015. The number of landlords exiting the market rose to five per branch, up from four in March, which was also up from three the month before.
But the number of prospective tenants registered per member branch continued to rise, increasing by 9% in April. In March, agents had 66 tenants on their books on average, rising to 72 in April. The number of tenants experiencing rent hikes also increased to 26% in April, this is up from 24% in April 2017.
Unfortunately for letting agents however, the number of rental properties managed per branch in April was 179, down from 193 per branch in April 2015. According to the HomeLet Rental Index, the average rent in the UK in April this year was £918 per month, or £11,016 per year. As most letting agents charge 12-15% of the annual rent to find a tenant and manage the property, the average letting agent has seen its annual turnover fall by £18-23,000 over the past three years.
David Cox, ARLA Propertymark chief executive, says: “The barrage of legislative changes landlords have faced over the past few years, combined with political uncertainty has meant the BTL market is becoming increasingly unattractive to investors. Landlords are either hiking rents for tenants or choosing to exit the market altogether to avoid facing the increased costs incurred. As demand for private rented homes massively continues to outstrip supply, the Government can no longer divert its attention from the broken housing market. The recent news that the Government is regulating the industry is a step in the right direction, but ultimately we just need more homes.”
The number of homes available to rent is falling
The number of homes for private rent in England fell by 46,000 between March 2016 and March 2017, according to recently released government data. This was the first year a 3% levy on stamp duty for the purchase of buy to let homes came into effect and the final year before the Government began its phased reduction in mortgage interest relief for the sector to the basic rate of income tax.