There was an eight per cent surge in the number of homes available to rent in the second quarter of the year compared to the first – and it’s all thanks to the stamp duty surcharge.
That’s the view of Rightmove which reports that most of the increase could be seen in London which had a remarkable 22 per cent spike in the number of homes to let in just the past three months.
As a result there has been a drop in London’s average rental asking price of 1.1 per cent to just under £2,000 per month; by contrast and despite the increase in supply, all other regions have recorded a rise in average asking rents this quarter, with the East of England leading the way.
“Our research shows that just under a third of [landlords] are concerned that the stamp duty changes, plus the forthcoming tax relief changes, will potentially wipe out their profits. Once the tax relief changes start to be phased in from next year new buy to let activity could slow further” warns Rightmove’s head of lettings Sam Mitchell.
Investors planning to continue expanding their portfolio could look to some of the areas with highest demand from prospective tenants, Rightmove says.
The top five places for demand include three in Greater Manchester – Ashton-Under-Lyne, Stalybridge and Oldham – where average asking rents for two-bedroom properties are around £520 per month and you can buy a two-bed home for around £100,000.
Demand as measured by email and telephone enquiries for rental properties from prospective tenants to agents on Rightmove was up two per cent in the second quarter of this year compared to the same period in 2015.
“It’s too early to speculate or predict any long term impact of Brexit for the rental market [but] these latest figures show that it’s business as usual for tenants looking for a place to rent. We saw a dip in demand the three days after the referendum result, but that soon returned to usual levels of searching” says Mitchell.