The government’s tax-take on landlords is having the effect many predicted it would as the Association of Residential Letting Agents (ARLA) reports an 8% reduction in the number of rental properties managed by agents during January.
ARLA says its member agents reported 184 rental properties managed per branch compared to 200 during December, the lowest figures for four months.
Such an alarming contraction in the market during a traditionally busy period is also taking its toll on tenants’ finances, ARLA says.
As the housing market forces more people into rented accommodation rather than ownership, ARLA says the number of tenants registered with agents increased from 59 to 70 per branch.
ARLA’s Chief Executive David Cox (pictured, below) says renters are in for a “rough ride” this year as the imbalance between supply and demand begins to push up rents.
It’s already begun, ARLA claims, revealing that nearly a fifth of tenants experienced rent increases during January, up from 16% during December.
The ARLA figures are backed up the latest rental index, which found that rents in the UK are rising across every region for the first time in two years.
Buy-to-let lender Landbay, which produced the index, also says rents are rising fastest in the East Midlands and the East of England.
“Housing stock is falling as rising taxes continue to force established landlords out of the market and deter entry into the sector – and the volume of renters is increasing as the cost of buying a home is moving further out of reach for many,” says David Cox.
“Ultimately, until the prospect of investing in the buy-to-let market is more attractive for prospective landlords, and stock subsequently increases, tenants will continue to feel the burn.”
The report from ARLA follows research issued last week by The Institute for Fiscal Studies on behalf of the Residential Landlords Association which shows that just 27% of 25-34 year olds in the middle income bracket are homeowners compared with 65% in 1995/6.