The lettings market in England and Wales is witnessing a paradigm shift. Recent findings from BVA-BDRC, a renowned research consultancy, paint a vivid picture of the current trends and challenges landlords face. As a premier letting agency in Finchley, London, David Harris & Co is here to guide you through these turbulent times.
Private landlords are currently more inclined to sell properties than to buy them.
In Q2 2023, 12% of landlords in England and Wales sold properties, while only 5% made purchases.
Research from BVA-BDRC, commissioned by the NRLA, indicates a trend of landlords downsizing their portfolios:
37% of landlords plan to reduce the number of properties they let in the upcoming year.
Only 8% intend to increase their property count.
Despite the reduction in rental properties, tenant demand is strong:
67% of landlords noted an increase in tenant demand in Q2 2023.
The NRLA warns of a deepening supply crisis due to rising mortgage costs and potential reforms in the Private Rental Sector (PRS).
The NRLA suggests the government reconsider recent tax changes for landlords, including the 3% stamp duty levy and restrictions on mortgage interest relief for long-term rental homes.
The second quarter of 2023 saw a distinct trend among private landlords: a propensity to sell rather than buy. A significant 12% of landlords chose to part with their properties, while a mere 5% ventured into purchases. This trend, at first glance, might seem counterintuitive, especially given the robust demand from tenants. But a deeper dive reveals underlying concerns that are reshaping the market.
The research, commissioned by the National Residential Landlords Association (NRLA), unveils a startling revelation: 37% of landlords plan to reduce their property portfolios in the coming year. This inclination to downsize has reached an unprecedented high. In contrast, only a small fraction, 8%, are looking to expand their holdings.
But what's driving this trend? The answer lies in the myriad challenges landlords currently grapple with. From escalating mortgage costs to looming uncertainties in the Private Rental Sector (PRS) reforms, landlords find themselves navigating a complex maze.
Despite the shrinking pool of rental properties, tenant demand is surging. An overwhelming 67% of landlords reported increased tenant interest in Q2 2023. This surge, while promising on the surface, underscores a looming crisis: the widening gap between supply and demand. The NRLA warns that without timely intervention, this supply crisis is set to deepen, leaving many potential tenants stranded.
The NRLA isn't just sounding the alarm; they're advocating for tangible solutions. Their call to action? Urging the government to reconsider recent tax amendments that burden landlords. Top on their list is the 3% stamp duty levy on rental property purchases and the curtailed mortgage interest relief on long-term rentals. These financial constraints, they argue, are exacerbating the supply crunch.
Ben Beadle, chief executive of the NRLA, said: “Whilst the Chancellor has developed a mortgage charter to help homeowners, the lack of assistance for renters and their landlords is clear for all to see. Households renting privately are facing the full force of the supply crisis, and change is needed now to prevent the situation from worsening over the next twelve months. The Government must reverse its damaging tax hikes on the sector. It is frankly absurd to have a tax system that punishes landlords for providing the homes tenants so desperately need whilst favouring holiday lets.”
In this shifting landscape, having a trusted partner is invaluable. At David Harris & Co, we're committed to helping landlords make informed decisions. Our expertise in Finchley's market ensures you're equipped to navigate challenges and seize opportunities. Whether you're contemplating selling, buying, or simply seeking clarity, we're here to assist.
The lettings industry is in transition, marked by landlords' inclination to downsize and soaring tenant demand. While challenges abound, with the right guidance and strategy, opportunities still exist. Partner with David Harris & Co, and let's navigate this evolving landscape together.
We have assisted many Finchley homeowners connect with willing buyers, and we know where these groups are looking for property. You can take the stress out of connecting with your ideal buyer by turning to a local estate agent specialist in Finchley.
If you want to make an informed decision in and around Finchley’s property market, we are here for you. If you have any questions about the local market, or you need assistance, please contact David Harris & Co today. Call us on 0208 346 9122.
