Shortage of supply in the lettings market continue to present a huge challenge for the housing market, according to the January 2017 Rics UK Residential Market Survey.
In January, new landlord instructions in the lettings market failed to improve for a fourth consecutive quarter across the UK, which surveyors said was an early sign of the pressure landlords face on tax.
In the last quarter of 2016 tenant demand for rental properties continued to increase at the national level with the continued imbalance between supply and demand expected to squeeze rents higher.
The exceptions to this pattern across the UK are to be found in London and Scotland where tenant demand is slipping back a little.
Surveyors expected landlords to decrease the size of their portfolios over the next three years due to changes to stamp duty and scheduled cuts to mortgage interest tax relief.
Nick McBreen, an IFA at Worldwide Financial Planning, said the figures were a bad omen for buy-to-let investors.
He said: "It is no longer a free lunch for buy-to-let investors as HM Treasury and HM Revenue & Customs have realised there is more tax to be picked up."
Charles Haresnape, group managing director of Mortgages at Aldermore, saw the need for developers to pick up the slack in the housing market.
He said: “This further supports our view that additional assistance is required for smaller developers which could go some way to alleviate the slow progress in addressing this deficit."
david.rowley@ft.com
