The number of buy-to-let landlords registering to buy property fell last month by 3.7% in England and Wales compared with the previous month, led by a 9.6% decline in London, owed in part to the fact that landlords are now being forced to pay 13% more to acquire buy-to-let properties in the capital compared with the same period last year, according to new figures.
The annual fall is greater, 35.3% and 52.6% on the year respectively. The number of buy-to-let sales fell on the month by 7% in England and Wales and by 4.2% in London. This comes as sale prices dropped by 2%% across England and Wales, and by 4.4% in the capital, the figures from haart’s latest national housing market monitor shows.
However, this is up by 0.1% on the year for England and Wales, and up 13.7% on the year in London.
The number of tenants entering the market in May dropped by 8.3% on the month, and 34.7% annually, placing downward pressure on rents which have decreased by 1.6% on the month, as the average rent now sits at £1,268 per calendar month across the UK, haart said.
Demand in London has also declined by 13.6% on the month, and by 34.8% on the year. Consequently, rents have fallen by 0.1%, and the average rental price now sits at £1,788pcm across London.
The decline in the number of buy-to-let property transactions is owed in part to the introduction of the 3% stamp duty surcharge on additional properties in April last year, the scrapping of the 10% ‘wear and tear’ tax relief for landlords who rent out furnished homes, tougher mortgage lending conditions, not to mention the phasing out of mortgage interest relief from the start of the existing tax year.
David Cox, chief executive, ARLA Propertymark, recently 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.”
“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 find ourselves in the midst of a real crisis,” he added.