Smaller landlords appear to be pulling out of the buy to let sector, just as demand from tenants is rising. Two thirds of letting agents are reporting they have more tenants registered than properties available, according to the latest quarterly survey from the Association of Residential Letting Agents.
The supply of properties actually decreased 6% in the last quarter, with the likelihood that the squeeze on supply will continue. Buy to let landlords appear to be selling their properties in greater numbers, to the extent that there are more properties leaving the rental sector, than new stock coming into the market.
“This activity has bucked the seasonal trend reported over the past 11 years for this quarter,” said David Cox, managing director of ARLA. “With landlords not investing in new buy to let property, tenants are finding it increasingly difficult to secure contracts.” While a good number of landlords are looking to liquidate their property assets, not all are finding sales at the level they expect, with the result that ARLA members are seeing an increase in properties returning to the rental market.
The round-up also noted that tenants are becoming a little smarter when looking at properties. A greater number are now checking out their landlords – albeit the number of those taking up references has only risen from 7% to 9%.