Lack of supply of available rentals will increase the cost of renting accommodation. That’s the warning from the Association of Residential Letting Agents (ARLA) as they report that landlords are hesitating due to lack of government commitment to the PRS.
Figures collected by ARLA from their letting agent members show that almost half are witnessing landlord uncertainty and hesitancy to let properties. This they claim “could cause waves in the rental market over the coming months”, in a market so far unaffected by the Brexit vote, but one which ARLA say needs reassurances that housing in the private rented sector (PRS) remains a government priority.
ARLA can see a situation developing where the risks may become too great for the average buy to let landlord, leading to them leaving the market and causing an even deeper housing crisis in the UK.
David Cox, managing director of ARLA, has said:
“The rental market has responded to Brexit in a calm fashion, with no immediate fallout amid extreme political and economic uncertainty. What we need is some certainty from the new government that housing remains a priority with the rental market playing a central role. For example, we want to avoid a situation where institutional investors start pulling away from the market because ultimately this will impact tenants by squeezing supply further and pushing up rents.
“Although we’ve seen some hesitation from landlords this is relatively mild and it’s important they do not act in haste. Any inevitable longer term changes will then be taken on board with greater ease.”
ARLA reported demand from renters increasing by 12% in June to 37 prospective tenants on average registered per ARLA member branch, up from 33 in May. But according to their survey the supply of rental properties on their agent’s books rose by just 3% in the same month.
Mr Cox said:
“If one thing is clear following Brexit, it’s that supply and demand remains a real issue in the rental market. If supply continues to dwindle against growing demand, no matter what the eventual implications of Brexit are, renting will become more difficult and expensive for tenants.”
ARLA’s warning reflects the general feeling among the landlord community that recent punitive tax changes and increasing “red tape” regulation, both at central and local government level, have pushed the effort / risk – reward balance too far into the negative.
Wavering landlords will push up rents https://t.co/7Rop1uSh5M
— LandlordZONE (@LandlordZONE) July 28, 2016