Buy-to-let landlords overwhelmed by rental demand

The availability of rental properties is worsening, according to research out today from the Association of Residential LettingAgents.
 
Covering the second three months of this year, the latest quarterly survey shows that 70% of ARLA agents say there are more tenants than properties available. This is an increase from 59% on the first quarter and compares with 24% last September.
 
In the South-East, 76% of member offices report more tenants than properties.
 
Ian Potter, operations manager of ARLA, said: “This situation has been deteriorating rapidly in recent months, as the supply and demand of homes to buy is also swinging out of kilter – making the prospect of a severe rental housing shortage ever more likely.
 
“In his Budget, the Chancellor did little to incentivise investment in the private rented sector. In fact, the rise in Capital Gains Tax may actually discourage potential landlords from investing.”

The latest LSL buy-to-let index also shows tight supply, which it says is bolstering rents and yields for landlords.

The company, which includes national chains Your Move and Reeds Rains, said rents rose by 1% in June – the fifth consecutive month to show a rise. The average rent is now £673 per month, the highest level since the peak in November 2008.  
 
But David Brown, commercial director of LSL Property Services, said the real problem was not CGT but the restricted availability of buy-to-let mortgages.

He said: “This has been the underlying factor holding back investment in the sector and the number of new rental properties hitting the market.”