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TODAY'S OTHER NEWS

Supply of rental stock nose-dives

The supply of rental properties plunged in the run-up to the new stamp duty surcharge on 1 April and further falls are expected.

Demand for rental properties also dropped in March, according to the latest private rental sector report from the Association of Residential Letting Agents (ARLA).

Rental property supply fell 4% in March to the lowest level since ARLA’s records began in January 2015.

The average number of properties per member branch is currently 169, down 12% from 192 in March last year.

Demand also dropped in March with 33 prospective tenants registered per ARLA branch, down 11% from 37 in February.

Two thirds of ARLA agents predicted that current and prospective buy-to-let landlords will walk away from the market following the stamp duty changes, hitting the supply of rental properties. 

One in three tenants faced higher rents in March, while more than six out of 10 ARLA members fear further increases as a result of the stamp duty change.

ARLA managing director David Cox said: “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 also warned that the quality of rental homes may decline in time, as tax-hit landlords struggle to keep up with maintenance costs.

Cox expected one of three outcomes in the buy-to-let market, with landlords either absorbing the extra cost, withdrawing from the market or hiking rents to cover their expenses.

He said: "Next month we can start to assess the damage.”

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