Shortage of supply heaps pressure on region’s housing market
Shortage of supply in both the West Midlands’ lettings and sales segments continue to present a huge challenge for the region’s residential market, according to laest data.
The RICS UK Residential Market Survey concluded that in January, new landlord instructions in the lettings market failed to improve and returned once again to negative territory.
Moreover, surveyors have predicted the issue could worsen over the medium term as they expect landlords to decrease the size of their portfolios over the next three years.
Changes to Stamp Duty in April alongside scheduled cuts to mortgage interest tax relief, were both seen as important factors diminishing the appeal of buy-to-let as an investment option.
Andrew Pearce, of Millennium Properties in Wolverhampton, said: “It appears that many landlords are selling for tax reasons relating to offsetting mortgage costs. Along with the changes in Stamp Duty stock continues to reduce whilst demand increases. Consequently, rents are continuing to rise.”
During the three months to January, tenant demand for rental properties continued to increase with the imbalance between supply and demand expected to squeeze rents higher. The exceptions to this pattern in the UK where found in London and Scotland where tenant demand is slipping back a little.
New buyer enquiries increased only marginally during January, with a net balance of just 8% of surveyors reporting an increase in demand – the softest reading since August last year.
New instructions deteriorated in January and as such, have now failed to post a positive reading in 16 consecutive months. There was a 42% fall in new instructions last month, leaving average stock levels on agent’s books still close to historic lows.
At the same time, sales fell for the second month in succession with 19% more chartered surveyors seeing a fall in sales over the month.
Sales are however predicted to improve in the near term with 8% more respondents expecting a rise rather than fall over the next three months nationally. Respondents also remain positive over the year to come with a net balance of +36% predicting that sales will increase.
