UK: British landlords say that nearly 500,000 private lets may become short-term rentals by the end of the year.
A report by letting agent trade body ARLA Propertymark says that these residences may be removed from market because of regulations against buy-to-let properties.
According to the report, one in ten landlords are likely to consider a switch to short-term lets. The numbers are even higher for those with more than five properties in their portfolio.
This may burden the already stretched housing supply of the UK. Up to 230,000 properties may be removed from the market if those who marked “very likely”, change their properties’ status.
The UK market for short-term lets has exploded recently. London has seen a 400 per-cent growth in listings, according to the report, and Edinburgh triple its own listings.
ARLA CEO David Cox said of the data: “The growth in short-term lets is particularly concerning for the traditional private rented sector. As landlords are continuously faced with increased levels of legislation, it’s no surprise they are considering short-term lets as a chance to escape this.”
Landlords place much of the blame on the Tenant Fees Act, which restricts what landlords can charge tenants, as well as tax overhauls for reducing profitability. Another law is similarly on the books, requiring more electrical safety checks on buy-to-let and HMO properties.
With these in mind, landlords see short-term lets as an alternative. With potential profits and more flexibility, they may make extremely strong investments for buy to let property owners.
Cox echoed this sentiment: “Unless the sector is made more attractive, landlords will continue to exit the market resulting in less available properties and increased rent costs.”
The short-term rental market, however, is becoming a major target for additional legislation. Scotland has recently announced intentions to change its rental laws, and London Councils have requested similar measures be enacted in the capital.