The private renting sector has for several years provided an alternative for the many people who move to parts of the UK for employment or to study and require short term tenancies. This group rent for a period between 6 months to 3 years, have no intention to hop on the property ladder, and even if they wanted to they are probably not eligible.
It appears plans by the Government to encourage more first time buyers on the property ladder by imposing the additional 3% tax on buy-to let investors is having a negative impact on private sector renting. The slow down in buy- to- let purchases has created a shortage of supply.
With rising rents and less properties available to let, the knock-on effect of the new tax is that it is restricting the choice for the average renter and leaving them out of pocket. So we have more access to the open market for potential first time buyers at the expense of renters who simply want to rent.
Rents had been expected to fall as landlords rushed to buy property ahead of the new stamp duty rates for buy-to-let properties in April. Your Move’s index shows a slowdown in the early part of summer, but surveys suggest that demand for rental property is outstripping supply. The latest report from the Royal Institution of Chartered Surveyors (Rics), published on Thursday, shows demand from tenants gathered pace in July, while there was a reduction in the number of new properties for renting..