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Rental supply slowdown
Four out of ten major towns and cities in the UK saw a drop in the number of new buy-to-let properties being advertised in September compared to the previous month , according to research by property crowdfunding platform Property Partner . The study identified 89 UK towns and cities , analysing the number of new rental properties being advertised between 1st September and 28th September , and then comparing it to the same period in August . Researchers at Property Partner found that of the 36 towns and cities , which saw a decrease in rental supply in September , 80 % ( 29 ) of those also experienced a decline in August . Grimsby , which fared better in August with a relatively small drop ( -5.15 %) in new rental listings , was the worst hit last month ( a fall of -26 %). The next three locations were in the South East – Oxford ( -24.4 %), Canterbury ( -23.9 %) and Brighton ( -18.7 %) but no region or nation was unaffected by the shortage in supply of new buy-to-let properties . Of the major English cities , London saw new rental property listings up only marginally by 1.43 % in September – although a considerable improvement from August when the supply of new buy-to-lets dropped by 16.4 %. Meanwhile , in Manchester and
Birmingham , new rental ads fell 13.04 % and 13.69 % respectively . The following table shows the 10 UK towns and cities that saw the biggest drop in new rental property listings between August and September and the August versus July change . Dan Gandesha , CEO of Property Partner , comments : " You ’ d expect a seasonal drop off in the number of new buy-to-let properties coming onto the market during August but September has also proved worryingly slow . We ’ ll have to wait until next month to determine whether this is just a short-term problem or something to be increasingly concerned about . “ The new stamp duty hike in April for buy-to-let and second homes saw a rush by landlords to beat the deadline with a subsequent rise in stock levels . But now that the dust has settled , we ’ re seeing some significant declines in new listings , particularly surprising after the Summer . “ Earlier this month , the Royal Institution of Chartered Surveyors ( RICS ) warned of a critical rental shortage . Traditional landlords have been given a proverbial cold bath with recent tax change announcements . The hike in the stamp duty surcharge in April has certainly discouraged landlords from increasing their rental portfolios . “ Alongside tougher lending criteria and cuts to mortgage interest tax relief starting next year , many landlords will be now doubting if it ’ s worth the hassle , particularly in the South East . Profits have been hit hard and those landlords that decide to stick with it , may just be forced to push up rents - not a promising prospect for tenants . “ Like RICs , we believe Britain should be building more homes across all tenure types . Over the past decade , more and more people have moved away from home ownership and become long-term renters . It ’ s time for the new government to make build-to-rent a key priority , encouraging the private sector to build properties for residential letting with incentives for institutional and ‘ professional ’ landlords .”
Town / City % change August vs July % change Sept vs August Grimsby -5.15 % -26.09 % Oxford -18.49 % -24.40 % Canterbury -30.45 % -23.96 % Brighton -21.35 % -18.74 % Cardiff -25.93 % -18.44 % Salford -7.56 % -18.03 % Coventry -11.36 % -15.05 % Birmingham -16.09 % -13.69 % Bristol -9.65 % -13.67 % Leeds -23.93 % -13.54 % Source : research by Property Partner
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6 Landlord & Buy-to-Let Issue 69 • November 2016