RICS: Agents report fewer landlord instructions

During the second quarter of this year a net balance of -16% of RICS’ member agents said they seen a drop in new landlords instructing them, its latest report shows.

Some regions saw larger reductions than others. In East Anglia the figure was -59% of agents reporting dropping instructions and -37% in the East Midlands.

But in London the falls were less pronounced at -4%, and in the North a net balance of +41% of agents reported rising rising instruction levels.

Rental market deteriorating

With the Renter’s Rights Bill on the way and the spectre of increases in Capital Gains Tax, there is a suggestion that landlords are starting to sell up.

RICS says its data “suggests the flow of listings coming onto the rental market is deteriorating” and there are similar comments from many of its members within the report.

There is increasing evidence of landlords exiting the market, which accounts for a large proportion of new sales instructions.”

Howard Davis, MRICS, says he has seen a “steady increase of landlords selling all or part of their portfolios”.

John Haigh, BSc MRICS FAAV says: “With the pending government changes to legislation for landlords, I believe many landlords are choosing to sell their properties, so more properties are coming to market alongside new builds.”

And Robert John Newton-Howes, MRICS, adds: “There is increasing evidence of landlords exiting the market, which accounts for a large proportion of new sales instructions.”

The RICS Market Survey also notes that at the same time growth in tenant demand has softened, with a net balance of +18%, which is some way below the average of +32% for the last twelve months.

Although the data clearly shows landlord numbers are falling, the numbers are still near the lows seen in July of last year, when they were -27% and so they are unlikely to be indicative of a mass exodus.