A Sheffield-based letting agent and prop-tech entrepreneur reports that many agents have experienced a significant drop in stock levels, as landlords continue to exit the market.
Simon Tillyer, Director of SheffLets and refencing app, Vouch, has seen rental stock drop by 25% over the last quarter in his agency, as higher stamp duty, the removal of wear and tear allowance and the phasing out of mortgage interest tax relief, is driving landlords out of the market. According to the letting agent, feedback from its Vouch customers, show that many agents across the UK are also seeing a growing shortage of rental stock.
This is trend is supported by findings from the National Landlords Association (NLA) that show around 380,000 buy-to-let property owners are looking to sell within the next twelve months. The data from the NLA also reveals that nearly a fifth of all UK landlords are looking to sell their buy-to-let properties, with almost 50% of them selling a flat or apartment.
SheffLets also reports that there are now eight tenants chasing each rental property, up by 25% year on year and expects the shortage in rental stock to worsen, in 2019.
Simon comments: “The current market conditions are tough for letting agents. Tenants are staying in properties for longer, there is a growing shortage of rental stock and tenant demand is rising. The Government has completely misjudged the impact of the tax hikes, which will inevitably hurt tenants financially, as landlords try to recoup eroded profits.
In fact, recent findings show that around a third of landlords (38%) are considering increasing rents to compensate for higher interest rates. (*Source: Property Partner, October 2018).
For agencies like mine, the fee ban threatens our very existence unless we can find ways to supplement the lost fee income. As it represents 20% of our turnover, it’s a significant chunk of income to find. Many landlords can’t afford to incur any further costs, so an obvious option is to pass on the costs to the tenant, via increased rents.
However, there are alternatives. Emerging Proptech solutions are offering letting agents ways to save costs, improve efficiencies and increase income. We have developed a referencing app to offer other agents a fully automated, web-based system delivering significant cost savings, via a comprehensive, time-saving solution.
Technology and applicants perform the tasks, meaning that agents simply monitor progress. Vouch creates efficiency in the tenant application process and improves business-wide productivity and profitability.
In addition, Vouch can also help agents supplement their revenue by providing them with commission on a range of media and utility packages, offered to all tenants signing new leases. We designed Vouch to simplify the tenant application process and help agents and landlords save money and benefit from a passive income stream.”