New rental properties listed by landlords in May were down 5.7% on March levels before the stamp duty surcharge was introduced, according to research by property crowdfunding platform Property Partner.
Every month, Property Partner looks at the number of new rental properties coming onto the market in 89 major towns and cities across the UK. After the stampede of landlords putting rental properties on the market in April, May saw a 15.4% drop in new rental listings.
However, Property Partner said that new listings fell so far in many areas of the country in May, that they actually dropped substantially below March levels, before the 3% stamp duty hike came into force.
May saw new rental property listings fall, compared to April, in 91% of those towns and cities that Property Partner looked at. Worcester experienced the biggest decrease in rental supply in May, a drop of 42.6% following a near 50% (48.9%) surge in new listings in April. New rental listings were also 14.6% below March levels. Bedford saw a huge 41.7% drop in new rental listings in May compared to April, and 33.5% down on March.
Dan Gandesha, CEO of Property Partner, said: “As anticipated, the rush of investors buying before April’s stamp duty hike caused a temporary spike in rental supply, which now seems to have been swiftly reversed.
“New rental listings in May were down almost 6% on March, before the surcharge spike. With high and rising demand, any prolonged fall in rental supply would only have negative consequences for tenants.
“It’s likely that rents would increase as landlords, facing less competition, pass on their additional purchase costs to tenants.
“A lack of available properties would also force more tenants into accepting poorer quality accommodation, particularly in areas with an acute shortage of stock.
“June’s figures will show whether this is just a market adjustment, or something more fundamental. It’s unfortunate timing with the EU referendum just two weeks away (June 23).
“But April’s stamp duty changes are just the first in a series of additional costs being piled on traditional buy-to-let. In the longer term, the private rented sector must be professionalised, to provide Generation Rent with enough good quality homes at rents they can afford.”