The lettings director at Urban, the online agency recently snapped up by Emoov, says the rental market is faced with significant problems “as it buckles under the strain of growing demand and dwindling stock.”
Adam Male - whose firm was part of a £100m merger involving Emoov and Tepilo in the spring of this year - says this week’s Royal Institution of Chartered Surveyors market report suggested rents were rising around three per cent.
But he says this prompts affordability worries which, combined with new laws, may ultimately damage the lettings sector.
“Soaring rents may be welcomed by landlords with the resolve to jump through the latest lot of legislative hoops rather than throwing in the towel, but a three per cent hike will be hard to stomach for those already struggling with current rental affordability” says Male.
He says the rise is “yet more proof that the government’s persistent stranglehold on the buy to let sector is doing more harm than good. A further decline in rental stocks is a direct consequence of landlords exiting the sector, a sector that was already in desperate need of more rental stock to meet demand, not less.”
RICS says its figures indicate “a further decline in rental stock over the [past] month”, a trend that has been emerging on the back of tax changes for landlords.
Contributors to this week’s RICS snapshot reported a drop in new lettings instructions for the 23rd straight month, while tenant demand continues to rise.
“As a result of the supply-demand imbalance, near term rent expectations point to further rental growth in the coming three months. Significantly feedback from London is also pointing to the imbalance between tenant demand and supply beginning to widen which has pushed up rental projections for the coming year” says RICS.
“Further out, rents are expected to rise at a faster rate than house prices in the medium term; average rental growth projections stand at around three per cent per annum for the next five years whilst prices are projected to rise by around two per cent on the same basis.”
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As the supply side shrinks then of course rents will rise to cover the extra tax due to S24. It won't hurt landlords because people have to live somewhere, but it will hurt those that can't afford the higher rents. They get frozen out of the market as the more affluent tenants take the properties.
This is why the emergency accommodation bill for the country is already £1 billion annually.
Landlords, tenants, councils, mortgage brokers and many other industry professionals openly state that landlords are leaving the sector because of S24, yet the well-known 'charity' - Shelter still makes no reference to it being a problem. Instead they use smoke and mirrors stating that ‘no fault evictions’ are the leading cause of homelessness. Isn't it time that Shelter fessed up as to why they're ignoring this issue?
In round figures how much rental accommodation have Shelter ever provided. Here's a clue, it's a very round number indeed
I would not put up rents,if I could keep more of any profit to plough back in to the business and house more people.This government is killing housing and taxing people to death !
Why, oh WHY can't MHCLG ( or their puppets - Shelter and Gen R ) see this ?
Nobody seems to remember Newton's 3rd law ( Every action has a REACTION, and Gov't policies and those responsible for influencing them are harming the very people they CLAIM to be trying to protect !
Almost 18 months after Grenfell and still so many survivors in temporary accommodation despite the government's empty promises to find new homes for all affected. When are they going to wake up to the reality that they need to keep landlords on board and work hard to support them.........not drive them out of the market with S24 and never ending legislation?
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