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Tuesday, January 26, 2016

Concern over Stamp Duty change - ARLA

The ARLA Private Rental Sector report for December reflects the usual seasonal lull in the rental market -  a drop in supply of rental properties matched by a fall in tenant demand.

ARLA report their agents registered an average of 29 prospective new tenants during December, down from November's - 34, and saw the average number of managed rental properties drop to 182, down from 189 in November.

The number of rent increases also slowed, with only 18% of letting agents reporting a growth in rent – down from 23% in November, and the lowest rate of 2015.

ARLA managing director, David Cox, reflected: 

“As we’d expect in December, the UK saw a lull in activity, with people putting off any moves until January. The supply of housing stock was down, and fewer tenants were on the hunt for new properties. It’s reassuring to see the number of agents reporting rent increases is still on the decline – some encouraging news for tenants as we start 2016.”

Moving into 2016

The majority of ARLA letting agents report concern over the BTL stamp duty reforms, with 62% predicting the reforms will increase rents costs, and 65% expecting to see decreasing supply as some landlords exit the lettings market.

However, in the short term, 24% agents have reported an up-swing in demand from BTL investors, galvanised by the looming April stamp duty deadline.

David Cox concludes: 

“With supply, demand and the number of agents reporting rent increases all declining in December, this could well be the calm before the buy-to-let storm. Buy-to-let landlords determined to complete purchases before the changes come into force in April are storming the UK housing market, meaning the lull we’d usually see is less significant. But subsequently, after April, we’re very likely to see the number of buy-to-let properties on the market begin to decrease, and this will most certainly have a detrimental effect on renters across the country.”

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