No real surprises from the Association of Residential Letting Agents (ARLA) in some of the forecasts for 2017 but it is still interesting to read. Of course the headline was predictably negative but the article is not. We decided not to even show you the headline!
However, article as follows: The number of new rental properties coming onto the market in the UK will fall next year, as a result of the increased stamp duty surcharge on additional properties, it is claimed.
According to the predictions for the coming year from the Association of Residential Letting Agents (ARLA) some 37% of members envisage supply falling in 2017.
Over half, some 52% of member agents expect rent prices to increase in 2017 as lower stock levels, combined with mortgage interest relief and the ban on letting agent fees will put upward pressure on rents.
At the same time they expect demand for rental properties to rise and with less stock available for prospective tenants, competition will be high in 2017.
Also, they are predicting that due to the rise in landlord taxes in 2016, landlords may be forced to sell some or all of their buy to let properties and exit the market. Also, for prospective new investors, it will be more difficult obtain buy to let funding in 2017 as lenders introduce tougher criteria.
‘Our private rented sector report findings over the past few months have been positive and we were confident approaching the end of the year,’ said David Cox, ARLA managing director.
‘However, following the announcement of an outright ban on letting agent fees during the Chancellor’s Autumn Statement, we expect rent prices to rise and tenants to be forced to look for properties in cheaper areas,’ he explained.
BASTION ESTATES COMMENT: It is clear rents will continue to steadily increase and the reasons why are driven by demand and the marginal dip in supply. We know the rental market is changing and nothing will realistically effect the ongoing demand. Will there be a drop in supply of houses coming onto the market is a different question and one we will have to wait and see for, but the simple facts are that buy to let property can produce exceptional returns for the investor with ongoing growth in price, rent and demand. If you want to know more feel free to contact one of the team.