Rental stock levels fell in March, latest data shows
When the second homes Stamp Duty levy was announced last November, many landlords indicated that they may choose to sell at least some of their portfolio, or hold back from investing in more properties.
And now, according to data from the Association of Residential letting Agents (ARLA), this has become a reality, with fewer homes on the rental market in the month before the deadline for the new tax than at any time this year.
In March 2015, ARLA said, the number of homes available to rent sat at some 192 per branch. However, by the same month this year, this had fallen considerably to sit at just 169 per branch. It marks a fall of some 12 per cent in the space of one year, as well as leaving rental homes at their lowest in terms of supply since January 2015.
This comes after a prediction from ARLA in March that 65 per cent of letting agents believed there would be a drop in supply levels as some landlords who feel they have been victimised by the chancellor choose to step away from the buy-to-let sector.
David Cox, ARLA managing director, said the temporary drop in rental stock levels will most likely continue for some time as well, largely thanks to the worries around the cost of investing and the additional tax changes set to come into play from April next year.
"We don’t expect falling supply to stop here. The recent Stamp Duty changes are very likely to cause supply to decrease even further, as landlords withdraw from the market," he said.
"Not only do our agents predict that rent costs will increase further, but rental homes may also face a decline in quality over time, as landlords struggle to keep up with maintenance costs alongside the higher Stamp Duty charge," he added.