Could rental hikes reduce the number of potential buyers?
With the impending clampdown on landlords and buy-to-let mortgages, rental costs are due to skyrocket despite the recent Brexit impact – making it even harder for renters to afford a deposit for a house.
With the increase in stamp duty in April, many landlords were scrambling to complete on buy-to-let mortgages during the month of March, over fears that properties would become unaffordable as new government policies aimed to encourage more private buyers into the market.
As mentioned in one of our articles earlier in the year, most of the fears held by landlords across the country became largely baseless, as lenders including HSBC and Virgin Money reduced their rates to as little as 2% to nullify any government changes and encourage further investment. As a result of the government actions, rents were increased to compensate for any higher charges levied against the landlords.
As we enter the second half of the year, an even larger upset has struck the UK in the form of the Brexit vote. A month ago the country voted to leave the EU – and now that the dust is starting to settle, those within the rental sector are beginning to realise that things may be looking a little rosier.
While the EU exit has had a definitive effect on house prices, rental charges have continued to rise. For many landlords, these frozen or falling prices mean that now is a great time to invest in cheaper properties that stand a better chance at avoiding the issues associated with the tax hike due in 2020. This will allow landlords to continue increasing rental costs, alleviating any worries they had about losing profit. For the property market as a whole however, there are negative aspects that cannot be ignored.
With increased rental costs, tenants hoping to gain a foothold on the property ladder will find themselves at an even greater disadvantage than before, as money meant for a deposit on their own homes will find itself in the coffers of their landlords instead – further limiting the amount of potential buyers in the market.
In areas popular with landlords such as university towns, vendors shouldn’t have a problem finding a buyer relatively quickly. However, vendors who live in areas of no interest to landlords could find themselves waiting even longer to sell their homes as the pool of buyers decreases. Luckily, they always have the option of enjoying a fast house sale through a property buying company who will buy any house for cash at competitive prices with excellent customer service.
How do I sell my house fast? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.