UK landlords quit sector as number of homes to let falls, survey says

Keep knowledgeable with free updatesSimply signal as much as the Property sector myFT Digest — delivered on to your inbox.The variety of rental properties approaching to the UK market fell sharply for the eleventh straight month in June, in response to a number one property survey that highlights a squeeze on the variety of properties to let. The Royal Establishment of Chartered Surveyors mentioned that “landlords proceed to depart the sector”, with its measure of “landlord directions” reporting a rating of minus 21 factors in June in a sign that extra property brokers have seen a lower in rental listings than a rise. Though this was increased than the rating of minus 34 recorded in Might, the measure has been damaging since August 2022, and has been at a double-digit damaging for the previous 11 months. Falling availability of rental properties is driving expectations that rents will rise within the coming months. Individually, knowledge from the Financial institution of England confirmed that solely 8 per cent of mortgages have been for buy-to-let properties, a drop of 0.3 proportion factors in contrast with a yr earlier and one of many lowest ranges in current data. Purchase-to-let mortgages accounted for a mean of 13.3 per cent of complete UK mortgages within the decade to 2022. “The sample of landlords exiting the market continues with only a few new investor patrons,” mentioned Stan Shaw, director of the property company Mervyn Smith in Surrey. “The market stays inflated and aggressive, however resulting from a scarcity of provide quite than intrinsic robust demand,” he added. Rics reported {that a} quarter of these it surveyed count on rents to rise over the subsequent three months, although this was decrease than 43 per cent final month. Among the many uncertainties dealing with landlords, among the property brokers talked about the renters’ rights invoice, which goals to abolish “no-fault” evictions and strengthening tenants’ protections. Adam Parkinson, of Countrywide Surveyors in Yorkshire, mentioned: “A number of longtime landlords have not too long ago offered citing issues with the current laws and significantly that they’d battle to evict unruly or unreliable tenants.”Landlords have additionally confronted increased mortgage prices mixed with the phasing out of mortgage curiosity aid since 2020. Taxation has additionally elevated with rising stamp obligation taxes on second properties in 2016 and 2025. Some economists mentioned the chancellor might lengthen nationwide insurance coverage contributions to landlords within the autumn, to assist fill a potential hole within the public funds.Tenants have been beneath pressures over the previous three years as their prices rose. Regardless of declining from a report excessive of 9.1 per cent in March 2024, rents rose at a gentle annual charge of seven per cent in Might, in response to official knowledge. The Rics survey additionally discovered that expectations for gross sales had improved, whereas measures of purchaser enquiries and agreed gross sales have stopped falling, indicating that the broader property market is stabilising. The home value indicator recorded minus 7 in June, unchanged from Might. Though costs are anticipated to fall within the coming three months, 24 per cent mentioned they anticipate value will increase within the coming yr.Tarrant Parsons, Rics head of market analysis, mentioned that the sooner distortion brought on by transactions being introduced ahead forward of the stamp obligation modifications carried out from April 1 now seems to have largely dissipated. “The UK residential market seems to be coming into a extra settled section, with demand exhibiting indicators of stabilising following a interval of volatility,” he added.