New stamp duty rules are causing landlords to sell up in droves
I am City A.M.'s digital editor. Having previously worked at Property Week
Selling up and getting out: new rules are hurting landlords (Source: Getty)
Letting agents have warned harsh new rules targeted at buy-to-let homes are driving landlords out of the market.
Figures published today by the Association of Residential Letting Agents (Arla) showed the number of landlords selling up rose to four per letting agent branch in March, from three in February.
Last year the government introduced new rules meaning landlords could no longer claim relief on interest payments on their mortgages, whilst also raising stamp duty on buy-to-let homes.
Although it was hoped this would help calm the market, at the time landlords warned it would put people off putting their homes up for rent, pushing up rental prices.
Today David Cox, chief executive of Arla Propertymark, said the warnings had come to pass.
"The market is becoming less and less attractive to investors and it appears some landlords are, as we predicted, choosing to exit the market rather than pay the higher taxes," he said.
However, the figures also showed the supply of rental stock increased eight per cent in the year to March, from 169 properties per branch to 183. The figure was flat on February.
The number of tenants negotiating rent reductions also rose, with 3.6 per cent of agents saying they had witnessed tenants knocking down prices in March, compared with 2.2 per cent in February. A quarter of agents said landlords had raised rents in March, down seven percentage points from March 2016.
Read more: London house prices have dropped by £10,000 in the space of a year
Lowest rent rise since 2013
The figures chime with a report from Landbay in March, which showed rents across the UK rose by just one per cent in February - the lowest rent increase since 2013. That was dragged down by the capital, where rents fell 0.5 per cent.
However, the Royal Institution of Chartered Surveyors (RICS) has suggested rents in the UK could rise by a fifth over the next five years.