Many buy to let property investors are selling up before the tenant fee ban comes into force according to the latest figures from Arla Propertymark.
The number selling up buy to let properties in April reached its highest level since May 2018, rising from an average of four landlords leaving the market per lettings agency branch in March to five in April.
However, this could lead to higher yields for those landlords holding fast and not selling up. The proportion of agents who reported that landlords had increased rents rose to 33 per cent last month, up from 30 per cent in March.
The number of tenants negotiating rent reductions fell in April, from 2.9 per cent in March, to 1.9 per cent last month – the lowest figure seen since May 2016.
Despite some landlords selling up, tenants had a greater number of rental properties to choose from in April than a year ago, at 202 instead of 179 per lettings branch.
This could imply that larger portfolio property investors are using the opportunity to increase their portfolios as other landlords leave the market.
Demand from prospective tenants fell slightly in April, with the number registered to look for properties declining from 67 in March to 64 last month.
Arla Propertymark chief executive David Cox commented: ‘As predicted, April’s findings have shown an upsurge in the number of landlords selling their buy to let properties. In just a few days’ time, on 1 June, the Tenant Fees Act will come into force in England. This, coupled with the proposed scrapping of Section 21, is forcing landlords to either increase rents or leave the market altogether.’
He continued: ‘As supply of rental accommodation falls further, tenants will only be faced with more competition for properties, pushing up rent prices on good-quality, well-managed properties and decreasing tenants’ ability to negotiate rent reductions. In order to remain profitable, landlords will increase rents to cover the additional fees they are now faced with and as a result, tenants will continue to feel the burn.’
Source: Residential Landlord