Whilst many of the proposed changes aim to improve the quality of Landlords and their rental properties for Tenants, they deter some Landlords from purchasing. This in turn is not good news for Tenants as the volume of rental properties will decrease, and rents may increase to counter the additional charges imposed on Landlords.
The industry has reacted to this, with many calling for extra support for Landlords and recognition of the contribution that they make to providing affordable housing.
With PwC’s prediction that that by 2025, 7.2m households would be in rented accommodation, compared with 5.4m in 2015 and 2.3m in 2001, there is concern that there may not be enough supply of rented accommodation to fit the ever-increasing demand. Jeremy Blackburn of RICS stated that: “The private rented sector became a scapegoat under the previous prime minister, and because of that it suffered. Yet with increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future. We must ensure that it is fit for purpose, and the government must put in place the measures that will allow the rental sector to thrive. Any restrictions on supply will push up rents, marginalising those members of society who are already struggling.”
The Managing Director of Martyn Gerrard, Simon Gerrard, has predicted that rents could increase up to 10% in 2017 due to the new measures: “The government’s changes to stamp duty and the tax regime for Landlords mean fewer rental properties coming onto the market. This can only lead to one thing, and that’s rent increases.”
It is no wonder then that Landlords are looking at ways that they can save money and the North has the answer. With higher rental yields of between 8% and 12%, Leeds is the Northern city of choice for Landlords wanting to make a greater return on investment. The North has the highest demand and yields plus cheaper property values making it the perfect solution for Landlords who will “naturally gravitate north” in 2017 according to Paul Smith, CEO of haart.
Stuart Law owner and founder of Assetz, agrees that the UK’s rental sector has experienced what he described as “a sea change” over the past year as “canny investors recognise that the North, not London, is where the best yields can be found. The lesson in 2017 that people must learn is that buy-to-let isn’t dead – it has just gone North.”
Let Leeds has a fantastic portfolio of buy-to-let properties available in and around Leeds. To find out more call our Sales Team on 0113 320 2000.