If PRS investors Leave The Market House Prices Will Be Hit
The full extent of the tax increases on the PRS investors could mean that many more will leave the market over the next year as they will view it as not being worthwhile to continue in the sector.
A property search website for agents and PRS investors predicts that it is increasingly likely that large numbers of buy-to-let landlords will leave, however the exit will have a negative impact on house prices.
The online portal reports that it has seen a sharp increase in numbers of homes for sale over the last three months and this will steadily increase over the next twelve months forcing down house prices.
It seems that the government’s all out attack on PRS investors has helped increase numbers of properties for sale to the detriment of decreasing numbers of rental properties, as PRS investors are looking to ‘take the money and run’.
The search property website states that by comparison to November last year, there has been an increase of 11% in new sales instructions in November this year. The private rented sector has not fared well as in the same yearly and monthly comparison numbers of rental properties has dropped by 16% and likely to continue to fall next year.
At this moment in time the private rented sector owns approximately 20% of residential properties, and is a major ‘influencer’ on the property market.
The director of the website, Doug Shephard, said: “Any sort of buy-to-let exit will tip the market to the downside and the UK government should be monitoring the situation very carefully. Why? Because such a risk to the housing market would imperil the banks and the wider national economic interest, especially post-Brexit.
“If landlords are forced to sell up, all property prices will be driven down, leaving the first-time home owner in negative equity and mortgage liquidity hard to find for the first-time buyer. Surely not something the government would wish upon the housing market in 2018.”