Despite rising demand, housing levels in Britain’s private rented sector are dwindling, highlighting the need for more investment in purpose-built rental property for the country’s growing number of tenants.
- Up to 4,000 traditional buy-to-let rental properties are being sold each month by private landlords
- New taxes introduced to curb buy-to-let investment are forcing more second property owners to sell due to rising costs
- At a time when more people are renting their homes, it is imperative that greater levels of investment is put into the purpose-built rental sector
The gap between supply and demand levels of UK rental property continues to widen.
Close to 4,000 traditional buy-to-let rental properties are being sold in the UK each month, according to the latest report from the Ministry of Housing. In total, supply fell by 46,000 properties in 2017, the first recorded decline in rental homes in the country for 18 years.
The reduction in the availability of buy-to-let homes, often older properties on the outskirts of city centres originally intended for owner-occupiers, comes at a time when private landlords are being faced with increasing costs. Two years ago, a series of new tax measures, including a 3% rise in stamp duty on buy-to-let purchases, came into effect, decreasing profit levels.
As a result, it’s prompted many landlords to leave the market. Recent figures from UK Finance highlight a 19% fall in new mortgages approved for buy-to-let homes in the UK.
These findings back up those published earlier in August 2018 from the Royal Institute of Chartered Surveyors, who believe that this falling supply at a time when the demand for rental accommodation continues to rise will drive rental prices up 15% by 2023.
Increased taxation aims to shift the focus away from the outdated buy-to-let sector and grow investment in the purpose-built rental sector. These homes, located in prime city centre locations with the best facilities, are the properties that modern tenants will pay premiums to access.
Source: Select Property