As landlords leave the BTL sector, rental demand increases

AFS Team·30 August 2018·4 min read
As landlords leave the BTL sector, rental demand increases

As landlords leave the BTL sector, rental demand increases

As landlords begin leaving the UK's buy to let sector, rental demand has hit its highest level this year, figures reveal.

According to Arla Propertymark, the number of prospective tenants registering with letting agents increased in July to an average of 79.

It's also the highest figure since September last year but the number of rental properties available has fallen by 4% year-on-year.

The figures highlight that the average number of rental homes available per branch is 184, which is down from July 2017's figure of 192.

Despite this rise in tenant demand, the number of tenants who are seeing rent increases fell slightly in the month.

‘BTL investors are being pushed from the market’

David Cox, the chief executive of Arla, said: "BTL investors are being pushed from the market by continued regulatory change and increasing costs and new landlords are deterred from entering.

"An average of four landlords last month took their rental properties off the market per branch and with supply falling, competition among tenants is increasing which is pushing up rents.

"Nearly a third of tenants saw rent rises last month, and while that's down from June, it's still too high."

He added that more homes need to be made available for renting and the government needs to make the buy to let market more attractive by investors.

Big differences in landlords' buying habits

Meanwhile, It's been revealed that buy to let landlords in the Midlands are investing in the sector and have a 'positive outlook'.

However, landlords in other parts of the country are scaling back on their investment plans, particularly in London.

The figures come from UK Finance and highlights that applications for buy to let mortgages for buying property have fallen by 40% since 2015.

Landlords in the Midlands are challenging the trend for investment

In addition, a sentiment survey of landlords carried out by Paragon has found that landlords in the Midlands are challenging the trend for investment.

The firm's managing director, John Heron, said: "The findings highlight there are big regional differences in landlord buying habits and experiences. Some landlords in central London appear to be scaling back while landlords in the Midlands are investing on the back of their positive outlook."

Around 42% of landlords in the East Midlands say tenant demand is rising and point to significant infrastructure investment, including the regeneration of Birmingham.