Despite the major role the privately rented sector plays in the UK it appears an unprecedented number of landlords are selling their properties.
The most recent National Housing Survey shows there are more tenants in privately rented accommodation than in social housing.
Yet, despite their importance to the nation's housing matrix, the National Landlords Association (NLA) claim that net growth in the private sector has fallen by over 60%. This means more landlords are selling properties than are buying.
More taxes = less rental accommodation?
Since the infamous announcement in 2015 by former chancellor George Osborne that mortgage interest relief was being withdrawn and a surcharge levied on stamp duty, a number of landlords have disposed of their properties.
The NLA claim 16% of landlords, up from 9%, plan to sell their property over the coming year. In a statement , Richard Lambert, Chief Executive Officer at the NLA, said: "If the trends keep moving in the same direction, then by 2018 we’ll have more experienced landlords selling than buying, contributing to a net reduction of private rented properties."
Lambert is also concerned the tax changes and trend for disposing of properties could lead to fewer investors becoming landlords. He said:"The progressive removal of mortgage interest from April this year, as well as a three per cent stamp duty surcharge on additional property purchases, means it will become increasingly difficult for anyone considering their first steps in the market.
Fewer homes for rent?
Given the importance of the private sector in providing much needed rental accommodation, the implications of so many landlords selling up, with less new landlords coming in to the sector, could be far-reaching.
With 20% of households living in privately rented accommodation, and a well-publicised housing shortage, taking stock out of the rental pool could see rents rise even further as the number of vacant properties reduces.
"The reality is more people now rely on private rented housing than ever before, and absolutely no good can come from fewer homes being available for those who need them most,” said Lambert.
Increasing demand for family homes
What is very clear is the ever increasing need for privately rented accommodation. The National Housing Survey also revealed there are almost one million more households with children now in the private sector compared to ten years ago.
This shows the reliance of families on private landlords rather than, as was traditional, on social housing.
Is it all gloom and doom for landlords?
No. Despite the problems and the seismic changes coming in April, when the tax relief on buy to let mortgages will come into effect, the demand for properties from tenants will continue to increase.
More people than ever are looking for rental accommodation. With more tenants competing for less properties landlords are able to charge a competitive rent and still be sure there will be plenty of potential tenants competing for the lease.
From finding tenants to full property management
With demand continuing to increase from tenants looking for new properties there is more need than ever for landlords to bring new properties into the housing mix.
If you are a new or existing landlord looking for help with finding tenants or managing your property make sure you take a look at the range of services we provide.