10:37 AM, 9th August 2018, About 3 years ago 3
From the Royal Institute of Chartered Suveyors (RICS) July 2018 UK residential market survey the most striking feature is the continued reduction of new property being put on the market in the lettings sector with 22% more respondents seeing a fall rather than rise in New Landlord Instructions. This is the eighth consecutive quarter in which this indicator has recorded a negative number.
The decreasing supply means rents are predicted to rise by 2% over the next year and by as much as 15% by 2023. East Anglia and the South West are viewed as likely to see the sharpest growth over the period.
This pattern reflects the shift in the Buy to Let market in the wake of tax changes which are still in the process of being implemented, as smaller scale landlords exit the sector. Significantly, the drop in instructions is evident in virtually all parts of the country to a greater or lesser extent.
Simon Rubinsohn, RICS Chief Economist, said:
“The impact of recent and ongoing tax changes is clearly having a material impact on the Buy to Let sector as intended. The risk, as we have highlighted previously, is that a reduced pipeline of supply will gradually feed through into higher rents in the absence of either a significant uplift in the Build to Rent programme or government funded social housing. At the present time, there is little evidence that either is likely to make up the shortfall.
“This augers ill for those many households for whom owner occupation is either out of reach financially or just not a suitable tenure.”
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