Fall In Buy To Let: Good For The Market?

renting home
Spread the love

While the lack of supply of homes in the property market has led to rising prices and many problems for buyers, the fall in buy to let properties available on the market may lead to positive news for buyers. When one thing happens in the property or rental market, it is likely that there is an impact elsewhere and with many industry experts predicting a difficult few years for existing landlords, there may be many looking to leave the market.

In fact, there is evidence that many landlords are leaving the market with Ministry of Housing figures suggesting 3,800 homes are being sold each month. This behaviour has led to a decrease in the number of properties available for rent, which is the first time there has been a decrease in 18 years.

Landlords have dealt with a lot in recent times

renting home

For 2017, there was a fall of 46,000 rental homes on the market, taking the overall tally to 4.79 million. This represents the most significant fall since 1988. Given the range of tax reforms that landlords have had to contend with in recent years, many people are not surprised at these figures. While the Government has provided support and new measures to help first-time buyers step on to the property ladder, many landlords feel as though they are being penalised by the Government.

If landlords are selling off their property, this increases the supply of homes to the property market. With demand currently outstripping supply for the property market, this is positive news. There needs to be more homes placed onto the property market and while this influx of homes may not lead to a reduction in the price of property, it could make it easier for some buyers to find a home that they are looking for. In this regard, landlords leaving the buy to let market is unwelcome news for tenants, but it could provide prospective buyers with an improved landscape.

Rental market would be affected by a lack of supply

Of course, you could argue that a fall in the supply of rental property will push prices up in that market which could lead to some tenants being forced into the property market. This could increase the number of buyers which in turn would balance out the benefits of increased supply to the property market. However, there is no guarantee that anyone priced out of the property market will find the funds to enter the property market. If that doesn’t happen, there will be increased pressure in the rental market with many tenants finding themselves unable to afford the rising prices.

If you are looking for guidance in the London property or rental market, please get in touch. I have considerable experience in the market and I am pleased to say I have helped many people achieve their property aims and ambitions. With a change in the supply of buy to let properties impacting on the rental and property market, it makes sense to stay informed of the market, so get in touch.

Matylda Nowak

CEO, Kings Accommodation


Recommended Articles