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A property search engine is claiming that landlords are deserting the private rental sector in their droves. Home.co.uk says there has been a 12% drop in listings for rental properties in the last year, and a 20% drop in London, where prices are much higher.
In London Rents are Rising
Property listings in Westminster, the most expensive part of London, have fallen by 447 in the last year. As supply dwindles, rents are increasing, and are now an average £5,292 per month – a 24% hike. The same has happened in another wealthy part of London, Kensington and Chelsea, where prices have risen by 14.7%.
Experts say the situation is dire. Government tax policies for landlords and increased red tape in the rental market are deterring landlords from continuing with their business. Many landlords have small portfolios, so they can least weather the storm. They do the maths and work out that even if they increase the rents on their properties, they are still losing money. As a result, many are coming to the conclusion that it’s more cost effective to sell up.
A Lack of Affordable Housing
Unfortunately, the private rental sector accounts for 20% of the UK’s housing stock, so when landlords start selling up, tenants in more popular areas will struggle to find a suitable rental property. This creates openings for rogue landlords who don’t care about providing suitable housing, red tape, or paying their taxes.
Will this situation continue? Some experts believe that negative sentiments in the PRS will have a ripple effect on the wider property market, which could cause problems for everyone – not just tenants.
