According to figures now being released by the Association of Residential Letting Agents (ARLA), the number of landlords putting their buy-to-let properties on the market and selling-up increased by 33 per cent in April in anticipation of a Labour victory.
Fearing rent controls and further anti-landlord measures which a Labour government was committed to in its manifesto, coupled with polls predicting a hung parliament with a high chance of Labour gaining power, some landlords were voting with their feet.
The result would have been, and still could be if these landlords carry through with their sales, a worsening of the already big shortage of accommodation and consequently yet more pressure on rents.
London was especially hard hit by the sudden exodus, with the number of potential London landlord sales doubling; a worrying prospect given that London has the greatest shortage of housing anywhere in the country.
It will be interesting to see if all these potential sales are carried through, given that the threats to buy to let have been removed after a Conservative victory, but common sense says that having decided to put their investments on the market, inevitably some with go through with it.
In Scotland were the threats to buy-to-let have not been removed, and in some ways are more severe under the SNP’s proposals, many agents have seen an increase from four to seven buy-to-let properties listed on their books for sale in the last month, while the national average increased from three to four.
David Cox, managing director of ARLA, said:
“It is interesting we have seen an increase in the amount of landlords selling their buy-to-let properties in the last month, which is likely to have been a result of political uncertainty.
“We know that Labour’s plans within the private rental sector were unpopular for many landlords and agents, so this increase in those selling their properties may have been a knee jerk reaction to the possibility of Labour’s proposals coming in to practice.”
Following the general election result some 90 per cent of ARLA are saying they are happy with the outcome of a majority Conservative government, and most think the result is good news for private renting.
David Cox has said:
“It is going to be interesting to see what happens in the market in the next few months following the election result and whether we see an increase in supply of rented accommodation as a result of the Conservative’s promise to build 200,000 new starter homes offered at 20 per cent discount to first time buyers.
“This policy will help first time buyers make that leap onto the housing ladder and as a result this will hopefully free up rental property.
“Hopefully, now the country is under less political uncertainty, we will begin to see the market pick up again and with the policies on offer in both the rental sector and housing market we should see the overall market heading into the right direction.”
The episode shows that even the prospect of anti-business legislation can have a dramatic effect on markets as we witnessed prior to the general election in energy as well as renting and house building.
— LandlordZONE® (@LandlordZONE) May 27, 2015