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.
