As the old saying goes – be careful what you wish for. The government wished to tilt the housing market towards first-time buyers and away from buy-to-let investors and that is exactly what they did. The problem is that, for a number of reasons, demand for property to rent is increasing at the same time as a significant percentage of current buy-to-let investors are looking to reduce their portfolios or even to exit property investment completely.

Demand up and supply down

According to a survey of 2,500 buy-to-let investors undertaken by the Residential Landlords Association, four fifths of landlords reported a stable (57%) or increasing (23%) demand for rental property.

Under other circumstances, this might be cause to celebrate (and it is certainly good news for buy-to-let investors who remain in the sector), under current circumstances, it should give the government cause for concern as no fewer than 25% of landlords indicated that they intended to reduce their portfolio.

This latter point was reinforced by government data which found that 10% of landlords were planning to reduce their portfolios while 5% of landlords were planning to exit the market completely.

To make matters worse the 10% of landlords planning to reduce their portfolios represent 18% of tenancies (the 5% of landlords planning to exit the market only represent 5% of tenancies).

Unfortunately (but understandably), there is no available data about where in the country these landlords hold their properties as this might have given some insight into how long it would take them to reduce or exit their portfolio.

Properties are selling at different speeds in different areas of the country

It’s no secret that the London market is moving at the pace of a sleepy snail and while it is arguably highly unfair to blame all its woes on Brexit, it’s also hard to deny that Brexit has acted as a brake on local housing markets the length and breadth of the UK.

In short, you could say that the effect of the (never-ending?) Brexit negotiations have been to make people in general more cautious. Home-owners who might otherwise have been interested in move are more likely to stay put while they wait to see what the post-Brexit future will look like and similarly those who might otherwise have been first-time buyers are standing pat in rental accommodation (or with their parents).

On the other hand, areas which have strong, “Brexit-proof” economies are, understandably, seeing less of a slowdown as people are more confident (or less nervous, whichever way you want to look at it).

Local markets reflect local economies

If you were expecting to see the north of England and Scotland showing the healthiest housing markets then, for the most part, you would be right, at least according to data from Gatehouse Bank.

Out of the five areas where days-to-sale have reduced the most (compared to last year), three are in the north, Oldham, Sale and Rotherham with a fourth being in Scotland, Glasgow, the outlier is Padstow in Cornwall, which is a popular tourist destination.

Looked at in terms of headline figures, Rugby, Sale and Edinburgh are the fastest-moving markets in the UK. The markets which are either slowing most of which have the longest days-to-sale figures are, as you might have guessed, mostly in the south, the unsurprising outlier being Aberdeen, where the property market essentially reflects the state of the oil market.

Author Bio

Indlu are estate agents in Manchester offering a no sale, no fee estate agency service in the North West, as well as a new lettings service and a free online property valuation.

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Daniel Peacock

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