It pains me to read yet another report on the supply and demand issues we are facing in the private rented sector (PRS) which concludes that the sector is shrinking at a quite alarming rate.
The research was carried out by Propertymark and has been featured on the BBC and draws data from member agents surveyed earlier this year. The respondents were predominantly letting agents (64%) with 35% both letting and sales, and their businesses had a combined total of over 4000 branches across the country, so it was great insight from those working day in day out in the industry.
The data shows the number of properties available to rent through letting agents in the month of March halved between 2019 and March 2022. During this period 84% of landlords who removed their property from the rental market did it to sell and over half of the rental properties sold in March 2022 alone did not return to the PRS.
91% of agents said that the primary reason that landlords left their PRS management was to sell the property.
Without doubt 2021 saw a housing boom, as prices rose by 10% which was the fastest growth rate for 15 years and was compounded by the pandemic which saw homeowners looking for more living and outdoor space.
Of course, there is always a degree of flux in the PRS and it is understandable that if a landlord was thinking of selling they would be motivated by a buoyant market. But with 53% of the buy-to-let properties sold in March 2022 leaving the PRS and a 49% reduction in properties available to rent per branch compared to two years ago, this is a worrying picture for private renters.
Commenting on the research, Nathan Emerson, CEO of Propertymark said “landlords and letting agents have been the subject of extreme legislation changes as the UK Government tries to improve the sector. However, without a middle ground, these changes are proving detrimental to those they are supposed to protect. Sadly, we do not see this improving as the sector braces itself for more changes within the anticipated Renters’ Reform Bill and upcoming energy efficiency targets.”
Through increased legislation and taxation, the Government is in grave danger of placing so much burden on the small, private landlords to the detriment of this much needed housing which the same Government also relies upon in housing strategy. With nearly 13 million renters, the PRS now represents 20% of all households and landlords play a vital role in maintaining a strong and thriving private sector. The last thing the private rented sector needs is more landlords selling up or investors discouraged from the buy to let market. The impact to housing would be significant.
If you have any concerns about your property and would like advice on how best to maximise your investment please do not hesitate to call me as I am always happy to help.