Business

After March buying spree, landlords flood rental market

properties to let Image copyright Getty Images

Landlords who scrambled to buy homes earlier this year are beginning to rent them out, providing tenants with a flood of properties, research suggests.

A record number of sales took place in March, as buyers tried to beat last month's Stamp Duty deadline.

That has resulted in an 11.5% rise in rental properties being listed in April, according to data from the website Rightmove.

Some places, like Worcester, have seen rental listings surge by nearly 50% .

Even in London, the number of homes for rent rose by 9.1% last month, says the research conducted by investment firm Property Partner.

It looked at 90 towns and cities across the UK, and found that the supply of properties went up in 82% of them.

Where rental properties are coming onto the market
Town Region % increase in listings (April v March 2016)
Worcester West Midlands 48.9%
Chelmsford East 38%
Stevenage South East 36.4%
Southport North West 34.4%
Telford West Midlands 32.3%
Cheltenham South West 30.3%
Watford East 29.4%
Bath South West 29.3%
Newport Wales 27%
Woking South East 26.8%
source: Property Partner

However many landlords may take some time to renovate their newly-acquired houses, before offering them for rent.

"Some landlords might want to do up their properties - such as getting the painters in, or installing a new kitchen - so there may be a delay," said Richard Donnell from the property website Hometrack.

"However, over the next one or two months, a reasonable slug of these properties will come on the market."

Lower rents

In theory, increased supply should mean a fall in the cost of renting.

But according to the Reed Rains buy-to-let index, rents have been falling in any case since September 2015.

At that time, rents in England and Wales hit an average of £816 a month. By April 2016 they had fallen to £791 a month.

But Adrian Gill, a director of Reed Rains and Your Move, believes they will not fall much further.

"Tenants still need homes and demand is still soaring," he told the BBC.

"So actually later this year the balance of supply and demand might shift even further in favour of landlords. A short-term spurt of supply won't shift the fundamentals."

Dan Gandesha, the chief executive of Property Partner, said the supply of rental properties was unlikely to continue rising.