There has been a rise in rental property instructions in recent months in a sign the buy-to-let market is rebounding, according to a survey of chartered surveyors.
The July 2020 RICS UK Residential Survey, published yesterday (August 13), saw 6 per cent more respondents report an increase in new buy-to-let property coming to the market in the past three months than did not.
This means surveyors are seeing landlords starting to come back or existing ones purchasing more properties.
While the professional body described the figures as only “marginally positive”, it noted it was the first time since 2016 that the flow of landlord instructions had reportedly improved.
The buy-to-let market grew rapidly after the financial crisis but has since taken a beating as a number of tax and regulatory changes have hit landlords’ pockets.
The changes led many to predict the buy-to-let market would shrink in size leaving only ‘professional landlords’ able to make viable returns, and many buy-to-let investors did leave the market earlier this year.
Meanwhile rents are also predicted to rise by about 1 per cent at national level in the next 12 months, according to the survey, although London was the only region where projections remained negative, at -1 per cent.
The sentiment survey found anecdotal evidence to suggest the chancellor's stamp duty cut was playing a “significant role” in lifting demand for house purchases, although respondents did not expect this to continue when wider government support measures are phased out later in the year.
Simon Rubinsohn, chief economist at RICS, said: “The strong impetus provided to the housing market is evident both in the results of the RICS survey and many of the anecdotal comments from respondents.
“However, it is interesting that there remains rather more caution about the medium term outlook with the macro environment, job losses and the ending or tapering of government support measures for the sector expected to take their toll. Significantly, some contributors are now even referencing the possibility of a boom followed by a bust.”
The government’s coronavirus support schemes for furloughed employees, the self-employed and mortgage borrowers are due to end in October.
In the survey 57 per cent more respondents saw an increase in agreed sales in July than did not, indicative of a strong pick-up in transaction levels after the hefty declines reported during the crisis.
However, 10 per cent more respondents predicted a decline in sales over the year ahead.