Recent research suggests that as a result of rising interest rates a record number of landlords plan to sell, with the National Residential Landlords Association warning that the supply crisis is about to deepen.
Yesterday, the Bank of England raised interest rates to their highest level since 2008, with the base rate now sitting at 4.5 per cent.
Brokers previously told FTAdviser that some buy-to-let clients were already contemplating selling late last year because the numbers no longer add up on rental properties.
Some brokers reported that their clients were paying as much as £800 extra a month on their buy-to-let mortgages in the wake of Liz Truss’s “mini” Budget.
Since then, lender product offerings have improved but many brokers have said the buy-to-let element of their businesses have dried up.
According to research undertaken on behalf of the National Residential Landlords Association, while 10 per cent of landlords said they plan to increase the number of properties they rent out, 33 per cent of private landlords in England and Wales are currently planning to reduce the number of properties in their portfolios.
This represents a significant increase on the 20 per cent who said they planned to reduce the number of their properties in the first quarter of last year.
The NRLA said this planned disinvestment comes despite demand being at a record high for rental accommodation.
According to the research, in every region of England and Wales more than 70 per cent of landlords said demand had increased, with the East of England recording the highest levels of demand.
To counter this, the NRLA said a review of the impact of tax rises on the sector is needed alongside new “pro-growth policies”.
NRLA chief executive, Ben Beadle warned that without change, matters will only get worse this year.
“Renters are bearing the brunt of the supply crisis.
“The government needs to reverse its damaging tax hikes on the sector, which have discouraged the provision of the homes tenants desperately need,” Beadle said.
He also added that landlords need reassurance that when no-fault evictions are legislated for and where landlords have good reason to end a tenancy – such as for tenant anti-social behaviour or rent arrears - the courts will consider and process cases in a swift manner.
jane.matthews@ft.com
