Buy-to-let market predictions for 2017
By Guest Blogger on 12 Jan 2017 in Industry News, Letting
By Dorian Gonsalves, Director of Belvoir Lettings PLC
2016 has certainly seen a few twists and turns in the property industry.
With the government appearing to landlords as determined to penalise them, a shock EU referendum vote and multiple changes within the government, remaining stable in the middle of a turbulent year was a real challenge for letting agents. To those that remained stable, it’s also a real testimony to the service levels that they offer.
At Belvoir, we always watch the markets closely to find trends and evaluate changes. We do this using our market leading Rental Index. This allows us to predict what trends may follow, to help us to weather any potential storms and be fully prepared for what may be on the horizon in the buy-to-let market.
We’ve seen many other agents place their predictions in which any day they expect to see rents rise faster than house prices.
We predict the same.
We’re anticipating a rise of up to 15 per cent over the next three years. But it’s worth noting that rental increases are viewed on a region-by-region basis, and will likely vary across the country.
The uplift in rental prices is instigated primarily by the recent anti-landlord policies that have been introduced in the last 12 months. These include the increase to stamp duty costs, the introduction of tougher mortgage lending criteria and the removal of mortgage tax relief for landlords. This, along with the government’s failure to increase the availability of social housing for rent, simply results in extremely short supply of good quality accommodation in the private rental sector.
For Belvoir, it’s business as usual despite the Chancellor’s recent confirmation that upfront tenant fees are to be banned. We’re waiting on further clarification as to what the plans and timescales are with this proposal, which is a process that could take months.
While we continue as usual, both us centrally, and our franchise owners will start looking at processes that will ensure business remains strong despite the changes. I would hope to see the government make pledges to drive up the amount of rental property available, or at the very least make the prospect of becoming a landlord a more worthy investment. Ultimately, we need to make the rental sector healthier in 2017, and the government should be setting this as a New Year’s Resolution.
Our Q3 2016 rental index showed us that 88 per cent of Belvoir offices had reported an increase in demand for rental property. When someone’s not able to put a deposit down and buy a house, they still need somewhere to live. The government’s awareness of this should be greater to ensure housing for those that cannot afford to buy.
As one of the strongest and most successful property franchise chains in the UK, we’re at the forefront of good business practice. We’re supportive of initiatives to improve customer service for landlords and tenants. I’m confident that, by adopting a sensible and measured approach, Belvoir will quickly adjust to the changes that lie ahead in the buy-to-let market.