Supply down, viewings up, more deals done

A new quarterly overview of the UK lettings sector reveals three key trends: viewings are rising and more tenancies are being signed, but supply is on the way down.

The first edition of the survey, to come out each three months from software company Reapit and market intelligence consultancy Dataloft, shows viewings up 13.3 per cent on a year ago, and lease signings up 3.5 per cent.

However, private rental supply has declined 6.9 per cent.

Despite this, rents have stayed broadly flat over the past year but the organisations behind the survey warn that rents may well rise over the coming year because of these trends.

Compounding the supply problem, they claim, is the withdrawal of landlord mortgage tax relief, which is encouraging landlords to sell.

The tax relief cut, which was announced in 2015, only took effect this year. As a result, landlords are increasingly considering selling their properties as their profits decrease.

“There are strong market indications that upwards of 10% of landlords are actively considering selling their properties. Multiple vendors have reported similar information, and we are actively tracking this phenomenon” explains Gary Barker, Reapit;s chief executive.

“Landlords deciding to sell their properties will further squeeze the supply-side of the rental market. There are simply not enough properties to meet demand” he adds.

The research looked at other factors driving rental value, like a good view. It claims the growth in high-rise apartment construction is delivering rent premiums.

Properties above the first floor command a 19 per cent rent premium in the capital and a six per cent premium elsewhere.

The next report will be released early January 2019.