The flow of new rental properties coming to market has fallen at its fastest rate in five years – proof that the landlord exodus continues unabated.
The Royal Institution of Chartered Surveyors (RICS) reports a “firmly negative trend” in landlord instructions, with the net balance of -31% last month - the weakest since April 2020. This lack of supply coming through is impacting rental prices which are expected to continue climbing during the next three months by a net balance of +25% of letting agents surveyed.
Many agents around the UK are reporting diminished stock, including Richard Franklin at Tenbury Wells- based Franklin Gallimore Ltd, who says: “The dwindling pool of rental properties has created a supply/demand imbalance which continues to fuel local rent inflation. Many BTL investors with one or two properties are leaving the market because of restrictions being introduced under the Renters’ Reform Bill.”
RICS also reports that tenant demand held steady in the three months to July, recording a net balance +4% and easing from +14% in the previous quarter.
David Smith, property litigation partner at Spector Constant & Williams, says the findings are unsurprising given the ongoing level of uncertainty in the sector, creating little appetite to invest and increased landlord departure.
“Landlords have been slowly exiting the sector since 2019, the pace is increasing due to the effects of the Renters’ Rights Bill and the unwillingness of the government to listen to reasonable alterations, the ongoing failure to make real improvements in the court system, and the increasing weight of regulation on smaller landlords,” adds Smith.
“However, the government is in the position of being able to make measurable improvements very quickly. It could accept House of Lords amendments to the Renters’ Rights Bill, be clearer about its future tax plans, and work more closely with the sector to make it a more attractive investment proposition.”
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