Property Newsletter | Supply & Demand

12 September 2017

News / Featured / Property Newsletter | Supply & Demand

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Private rented sector (PRS) tenants are facing a shortage of suitable rental property, just at a time when demand for renting is increasing.

According to a recent survey of almost 3,000 landlords carried out by the Residential Landlords’ Association (RLA), 22 per cent of landlords are planning to sell at least one of their properties over the next year.

This is likely, at least in part, to be in reaction to the implementation of changes to taxation for landlords together with other changes to lettings legislation and the pending ‘tenant fee ban’ due to be debated in the House of Commons on the 6th September.

This combination can leave landlords feeling like they are somewhat ‘under attack’, potentially looking at increasing costs, a higher income tax liability and a greater legislative burden.

But is selling the answer?

It could be – but you should fully consider the long term effects before committing to sell:

  • It's unlikely that you will be able to re-invest your cash and generate a higher yield (at least not without taking a higher risk route).
  • If you decided later to re-enter the PRS, stamp duty would be greater with the 3% levy added now on BTL purchases.
  • As potentially more landlords sell – fewer rental properties are available, with simple supply and demand logic meaning rents are likely to increase – which may offset any increase in costs.

If you are still on the fence there are a few other things that you (or your letting agent) can do to tip the balance back in your favour.

  • Review your rental income – does it match similar properties currently on the market? If not look to negotiate a rent increase at the next renewal of tenancy.
  • Talking of renewing – if you are happy with your tenants why not look to renew for a longer term, this gives them security and you a fixed income for a longer period – you can also include a rent review to make sure your income doesn’t stagnate.
  • When did you last review your mortgage rate? The chances are if you currently not in a fixed term mortgage you may be able to save some money here also.

We can help with all of the above – contact us today to find out more: click here

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