Tenants in the private rented sector could find it much harder to rent a property, according to new research by the Residential Landlords Association.
A survey of more than 3,000 landlords conducted by the RLA has found that 22% are planning to sell at least one of their properties over the next 12 months, while at the same time 33% report growing demand for rental accommodation over the last three years.
According to the RLA, who used figures from HMRC, if these landlords reduce their portfolio by only one property each, that would amount to a total loss of 76,000 properties available to rent over the next 12 years.
More than a third of the landlords surveyed, 35%, said that recent tax changes including Section 24 phasing out mortgage interest tax relief and the hike in Stamp Duty, along with other reforms to the private rented sector, including the cap on tenants’ deposits and the ban on letting agents’ fees, were forcing them to withdraw from the sector or increase rents.
The RLA Chairman, Alan Ward, said: “As demand continues to increase for homes to rent, punitive tax changes are discouraging investment by the majority of good landlords who want to provide accommodation.
“Whilst efforts by the Government to support institutional investment in the sector are welcome, this will remain a drop in the ocean.
“To meet demand, we need pro-growth taxation that actively supports and encourages the majority of landlords who are individuals providing good housing, to invest in the new homes to rent we so desperately need.”
The new research from the RLA comes as UK Finance also published research showing that buy to let investors were pulling out of the capital and investing elsewhere, with Manchester a preferred destination.
Together the figures from the RLA and UK Finance suggest that the impact of a shortage of rental properties caused by landlords selling existing stock could be felt more acutely in certain parts of the country, with the capital worst affected.
If you’re a landlord considering selling a property as a result of Section 24 and the increase in Stamp Duty, or you have a property in negative equity, contact Landlord Debt Advisory on 0161 222 4311, or go online to landlorddebtadvisory.com.