The UK has suffered its steepest quarterly fall in rental properties being brought onto the market since records began, amid fears that tax changes could lead to an exodus of landlords in the sector.
According to a closely watched survey from the Royal Institution of Chartered Surveyors (Rics), 22 per cent more respondents saw a fall rather than rise in new lettings on the property market in the second quarter of the year.
The statistics marked the largest negative figure since the survey started in 1999, and the eight consecutive month in which more surveys saw a fall rather than a rise of landlords putting up rental properties.
In London the lettings data suggests that the picture is broadly similar, with more landlords taking properties off the market for the third month in a row as “smaller scale landlords exit the sector”.
“It’s reaching a tipping point now where landlords are just selling their properties rather than trying to rent them” Rics economist Tarrant Parsons told City A.M.
Parsons added: “Conditions are no longer favourable, with government initiatives in the buy-to-let sector and second-home taxes making many reconsider how viable it is to rent out residences.
“If this trend persists, then a sustained decline in rental properties coming onto the market would lead to higher rents.”
The fall in private rental supply comes as demand for rental properties starts to edge up, with Rics predicting a two per cent rise in rents over the next 12 months as more renters compete for a limited number of residences.
Abdul Choudhury, Rics policy manager, said that “recent government policy and legislation changes” have hampered growth within the private rented sector.
Adam Male, director of Lettings at Urban.co.uk, said: “This notable reduction in the lettings market is a direct consequence of successive chancellors keeping their foot on the throat of buy-to-let landlords, through the implementation of initiatives like the increase to stamp duty thresholds & section 24.”
