According to a survey of chartered surveyors, there has been a steady increase in rental property instructions during recent months – an indication that the buy-to-let market is rebounding.
The July 2020 RICS UK Residential Survey was published last week, and saw that 6 per cent more respondents report an increase in new buy-to-let property arising in the market during the past three months than did not.
The findings mean that surveyors are beginning to see landlords come back, or existing ones purchasing more properties.
Despite the professional body describing the figures as only “marginally positive”, it has been noted that this was the first time that the flow of landlord instructions had reportedly improved since 2016.
The buy-to-let market expanded swiftly after the financial crisis, but has since faced challenges as a number of tax and regulatory changes have hit landlords’ pockets.
Many believed the changes may lead to a shrinking of the buy-to-let market leaving only ‘professional landlords’ able to make viable returns, resulting in many buy-to-let investors leaving the market earlier this year.
According to additional findings published by the survey, rents are also predicted to rise by around 1 per cent at national level during the next 12 months. However, London was the only region where projections remained negative, at -1 per cent.
The sentiment survey also found significant evidence to suggest the chancellor’s recent announcement of a stamp duty cut was playing a “significant role” in lifting demand for house purchases, however respondents did not expect this to continue at the end of the year when wider government support measures are phased out.
Simon Rubinsohn, chief economist at RICS, said: “The strong impetus provided to the housing market is evident both in the results of the RICS survey and many of the anecdotal comments from respondents.
“However, it is interesting that there remains rather more caution about the medium term outlook with the macro environment, job losses and the ending or tapering of government support measures for the sector expected to take their toll. Significantly, some contributors are now even referencing the possibility of a boom followed by a bust.”
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Coronavirus support schemes launched by the government for furloughed employees, the self-employed and mortgage borrowers are due to end in October.
In the survey 57 per cent more respondents saw an increase in agreed sales in July than did not, suggesting a strong increase in transaction levels after the significant declines reported over earlier stages in the crisis.
However, 10 per cent more respondents predicted a decrease in sales throughout the year ahead.