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ARLA Predicts a Housing Shortage from This Month

The Association of Residential Letting Agents (ARLA) is predicting that the supply of rental housing will fall once the April tax-hike takes effect. They also believe that many landlords will raise rents to counteract their increased costs.

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ARLA Survey of Members A survey carried out by ARLA has revealed that 63% of members thought the UK rental supply would fall as buy to let investors think twice about entering the private rental sector. 57% of letting agents thought rents would increase as a result of government tax cuts, whereas 73% of agents in London are convinced this will happen.

ARLA says: “Although members are reporting a rush from landlords trying to snap up their buy-to-let investments now, it’s likely that we’ll see the buy-to-let market drop like a stone come April and probably not pick up again until next year. This will most certainly cause rents to increase, with supply dropping, as competition for the limited availability of properties intensifies.”

Government Measures to Help First Time Buyers George Osborne has increased stamp duty land tax for buy to let landlords and people with second homes. Landlords are also faced with a reduction of mortgage interest relief. The chancellor hopes these measures will cool off the housing market, but what’s likely to happen is that many landlords reconsider their investment and pull out of the sector. An increase in rents plus a greater shortage of rental housing will make it even harder for first time buyers to get a foothold on the housing ladder.


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