Property Newsletter 25th Feb 2025

TENANTS STRUGGLE AS SHORTAGE OF RENTAL HOUSING CONTINUES

Private sector tenants are continuing to struggle as new data highlights an ongoing shortage of homes to rent. Almost eight in ten landlords (77 per cent) across England and Wales reported strong demand from prospective tenants in the final quarter of 2024 according to research from Pegasus Insights. The data, compiled for the National Residential Landlords Association (NRLA), suggests demand is highest in South West England. 81 per cent of respondents in the region reporting strong demand. This was followed by 80 per cent who said the same in the South East and the North West. Looking ahead to the next 12 months, 41 per cent of providers of rental housing say they plan to cut the number of properties they rent out, compared to just five per cent saying they will increase the number. The figures follow government data which show that selling property is the single biggest reason for bringing a tenancy to an end, and almost three times bigger than the next most common reason. With demand far outstripping supply, the impact will be felt most acutely by those in receipt of housing benefits, as the support they receive to cover their rents is set to be frozen from April this year.

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Source: NRLA

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IMMINENT TAX RISE COULD BE DEATH KNELL FOR BUY TO LET – CLAIM

A tax rise coming in just five weeks’ time could mean the death knell for buy to let. A new analysis shows that 83% of all housing transactions will incur stamp duty from April, when thresholds revert to an earlier level. Currently only 49% of transactions incur the tax. The report reveals that first-time buyers will be less affected, with only 40% of their transactions subject to tax, compared to 20% under existing rules. But for landlords, the stamp duty surcharge increase from 3% to 5% for second homes and buy-to-let properties from April will place an additional financial burden on an already stretched market. The study – undertaken by investment service UOWN using government, Zoopla and Rightmove data – has added this new tax burden on to existing costs incurred by landlords as a result of regulation changes in recent years. These include higher mortgage costs, increasing insurance premiums, stricter EPC rules and more. The study particularly not that the phased removal of mortgage interest tax relief “has already dealt a heavy blow to landlord profitability, further compounding the issue.”

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Source: https://www.landlordtoday.co.uk

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RENT GROWTH SLOWS FOR NEW TENANCIES – BUT RENEWAL PRICES SOAR

The pace of rent rises for new tenancies has dropped, with average monthly payments climbing by just 1.8% in January compared to the previous year, Hamptons reveals. It`s data also shows that this is the smallest rise since October 2020 to mark 18 months of continuous easing. For tenants signing new leases, the typical cost now stands at ￡1,372. However, renters opting to extend existing tenancy agreements have faced steeper hikes, with rents surging by 6% over the past 12 months. This brings the average renewal figure to ￡1,263, which is still ￡109 shy of what newcomers are shelling out. Hamptons says that landlords are keen to meet the market rates rather than increase rents at a slower pace for loyal occupants.

Source: https://www.property118.com/