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There has been a significant drop in investment property listings in recent months according to new research from the Residential Landlords Association (RLA).
The drop in property listings is set to be followed by a further net loss, according to the research which was taken out by the RLA’s research facility, PEARL. The research found that landlord sentiment towards the sector and rental investments is deteriorating. This is leading to a spike in the number of landlords exiting the rental market.
It is estimated by the RLA that 46,000 privately rented homes have already been lost, with a further net loss approaching of 133,000 homes to rent. The issue is worsening as small-scale private landlords exit the sector largely due to increased financial pressure from tax and legislative changes. These changes are making it unviable for many landlords to operate.
Research by RLA PEARL found that 62 per cent of private landlords have reported that their profitability would be reduced by at least 20 per cent. A further 67 per cent reported that they would minimise investment due to the government tax changes.
This lack of availability is particularly problematic for tenants, especially those who claim housing benefit or Universal Credit. These groups already face increased competition for properties and are hampered by rising rents.
RLA PEARL stated that the growth of the private rented sector over the past 20 years has been driven by the small scale landlords. The organization is therefore speaking out for the government to do more to support them. A suggestion on how to do this was through tax incentives as part of their new plans to provide tenants with longer term tenancies, which in turn offer greater security of tenure.
Dr Tom Simcock, who headed up the research for RLA PEARL, explained: ‘We need to move to a broader but fair reform of private renting; with improved access to justice for landlords and tenants, expanded options for security of tenure, and reformed taxation policy that supports not penalise private landlords.’