Ahead of the Renters’ Rights Act coming into effect, landlords sold up as rental demand continued to outstrip supply, according to a new survey.
Propertymark’s Housing Insight report found that concerns over the incoming regulation prompted many landlords to exit the market before the changes took effect.
The industry body warned that reduced supply is likely to keep conditions in the private rented sector challenging throughout the year.
Ongoing concerns from landlords
The report, which covered March before the legislation came into force, found demand continued to outstrip supply, with the average number of applicants per member branch standing at seven per available property.
Propertymark warned the regulatory changes could create longer-term supply pressures.
A Propertymark agent from the North East told the report: “The UK government changes have upset many landlords who are now selling, giving agents a huge amount of work that will directly negatively affect profit and will ultimately mean rents will increase as rental property supply reduces.”
Nathan Emerson, chief executive at Propertymark, said: “Within the lettings sector, demand continued to significantly outpace supply despite a modest uplift in available stock.
“Many agents were reporting ongoing concern from landlords surrounding future regulatory changes, which were influencing investment decisions and contributing to longer-term supply challenges.
“Ensuring a stable and sustainable private rented sector remains essential to supporting tenants and maintaining choice across the market.”
Renters face affordability pressures
Phil Spencer, founder of Move iQ, warned renters are likely to continue facing affordability pressures as tenant demand rises.
He said: “In the rental market, competition remained fierce, with demand still heavily outweighing supply in many parts of the country.
“Renters continued to face affordability pressures, and concerns around future supply could keep the market challenging throughout the year. For consumers on both sides of the market, preparation and good advice remained more important than ever.”
Encouraging signs
In the residential property market, the report found March saw an increase in activity, with the average number of sales agreed per member branch rising to 8.14.
The average number of new prospective buyers registered per branch also edged higher, reaching 78.
Mr Emerson said the market showed encouraging signs despite ongoing affordability pressures.
He said: “March was a month that delivered some encouraging signs across the housing market, with sales agreed, buyer registrations and viewing activity all moving in a positive direction as we entered the traditionally busier spring period.
“Although inflation remained above target and global economic pressures continued to influence sentiment, we saw many buyers adapting to current borrowing conditions and proceeding where pricing expectations were realistic.
“We also saw improved levels of stock entering the market, which was helping to provide consumers with greater choice and creating a more balanced environment in some areas. However, affordability pressures continued to weigh heavily for many households, particularly as mortgage rates remained sensitive to wider economic events.”
