Research by Rightmove the property website, reveals the rental and buy-to-let market is looking rosier than expected.
Listings of properties for let rise
The results of the increase stamp duty for buy-to-let has shown itself in a positive light for tenants in the number of available properties for let in the three months ending in September.
Rightmove found rental listings had risen by 6% in the three months to the end of September compared to the same period last year. The rise in supply was even more pronounced in London, where it climbed 15% year on year.
Buy-to-Let purchases recovered
Rightmove said the appetite for new buy-to-let purchases had also recovered strongly, with purchasing inquiries by investors on the site up 30% since May.
Sam Mitchell, Rightmove’s head of lettings said: “The changes starting in 2017 to lessen mortgage interest tax relief may see some seriously review their businesses and [they] could scale back, though there appear to be no signs yet of landlords exiting the market.”
Some agents report that many investors are looking to knock sellers down on their asking prices to make up for the additional stamp duty they now need to pay.
Changes to rent
Researchers also looked at more than 387,000 asking rents to assess changes in tenants’ costs. It found they were slightly higher — 0.5% — in the three months to September, but this concealed wide regional variations: rents in the north-west were up 2% annually and in Scotland by 1.5%, but down in London by 1.5%t over the year.
So what does this mean for the future of Buy-to-Let?
Brian Murphy, head of lending for broker Mortgage Advice Bureau, said the Rightmove data would make “reassuring reading” for property investors and those considering going into buy-to-let, since it was one of the first pieces of analysis to cover the three-month period after the Brexit vote.
“[The data] would suggest that the buy-to-let sector will remain stable, and providing that the current levels of stock and supply continues, for many landlords and investors both capital growth and rental incomes would appear to be maintaining strong momentum.”
The resurgence comes in spite of other government and regulatory measures which were expected to mute the growth of the landlord market.
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