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Increased taxes pushing buy-to-let demand down
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The number of buy-to-let landlords registering in order to purchase property in England and Wales fell by 3.7% month-on-month to May.
This was driven by a 9.6% fall in London, owing largely to the fact that landlords in the capital are now being forced to spend 13% more in order to obtain a buy-to-let property.
Significant Annual Falls
When looking at annual declines, the percentage is much greater, totalling 35.3% in England and Wales and a huge 52.6% in London.
In comparison to May 2016, buy-to-let sales are down by 7% in England and Wales and by 4.2% in the capital. Sale prices also fell in the same period, by 2% in England and Wales and by 4.4% in London, according to haart’s latest national housing market monitor.
Year-on-year however, these prices were actually up by 0.1% in England and Wales and by 13.7% in London.
Increased taxes pushing buy-to-let demand down
Tenant Troubles
The number of tenants coming into the market in May fell by 8.3% month-on-month and by 34.7% annually across England and Wales. This in turn hat put downward pressure on rents, which have fallen by 1.6% on the month.
Average rents now total £1,268pcm across the whole of the UK.
In London, tenant demand has fallen by 13.6% over the month and by 34.8% over the year. As a result, rents here have fallen by 0.1% and the average rental price is at £1,788pcm in London.
David Cox, chief executive of ARLA Propertymark, said: ‘It’s been a year since the Government inflated stamp duty costs for landlords to 3% and it’s already made the Treasury £1.3bn. That’s more than changes to mortgage interest relief, which are now in force, are expected to make in its first three years. This will only further squeeze the sector and make buy-to-let a less attractive investment for landlords.’[1]
‘We’re facing a severe housing shortage at the moment and if the supply of rental stock falls any lower relative to demand for housing, we’ll fund ourselves in the midst of a real crisis,’ he added.[1]
[1] https://www.landlordtoday.co.uk/breaking-news/2017/6/demand-for-buy-to-let-falls-as-higher-taxes-bite
