Rental costs could overtake home buying prices says industry bodyDate Posted: 14 February 2017
Changes in tax charged to landlords could see a sharp rise in rental costs, according to the Royal Institution of Chartered Surveyors (RICS).
Stamp duty and other tax changes made in recent months have affected the buy to let sector and the RICS believes this may lead to many landlords reducing the number of properties they own.
This means that rental prices could rise faster than house prices in the next five years, further exacerbating the shortage of affordable housing and leading to more tenants chasing fewer rental properties.
The RICS said that supply in the rental market needed a “turbo boost”. It also said the number of properties for sale across the UK remained at historic low, but that it expected that to change in the coming months.
Ross Hooper-Nash, Managing Director of Jeffrey Ross Estate Agents, said: “This is really interesting research by the RICS. Increases in stamp duty and tax has had an effect on the market and in Cardiff we already have a huge demand for rental property.
“The housing market is buoyant, but the rental market is much stronger and so it will be interesting to see what happens with the cost of renting in and around the Cardiff area when the tax changes start to affect landlords’ bottom line.”
Ross added: “I can’t see it having an immediate influence in Cardiff as yields for rental properties are very good here. But in the long term it may put off new landlords to the market or those who just wanted to buy a property as a nest egg for retirement, which would be a great shame, as we need every rental property we can get in this city.
“Cardiff is seen as a dynamic and expanding city and with the development of new offices around the centre of the city and near the station, demand for rentals will be even greater in years to come.”