Buy-to-let sell-off begins
Buy-to-let investors have started selling off properties as Chancellor George Osborne's tax crackdown begins to bite.
Demand is also likely to fall over the next six months as new investors scrap their plans.
The number of landlords selling their properties rose by a third in April, according to the April private rental sector report from the Association of Residential Letting Agents (ARLA).
Its figures show that each member branch saw an average of four landlords pulling out of the market, up from three in March. This is the first increase in a year.
The supply of properties for rent jumped following the rush to complete sales ahead of the stamp duty surcharge on 1 April.
Rental properties per branch increased by 8% in April to the highest level this year, but supply is still 5% lower than in April last year.
In April 2015, the average number of properties managed per branch was 193, this year it stands at 183.
Demand is also falling slightly with 34 prospective tenants per branch, down from 36 in April last year
Two-thirds of ARLA agents predicted that the stamp duty reforms will push rent costs up for tenants in future.
ARLA managing director David Cox said the increase in supply was likely to be temporary. “At the end of April we saw a flurry of landlords seizing the last few moments before the stamp duty rise to complete sales, triggering an increase in the supply of empty rental homes to be filled this month.
“However, we expect that fewer investors will be taking on buy-to-let properties over the next six months, meaning that once these properties are filled we’ll see supply nose-dive once again.”