Market Thoughts column: How the recent Budget might influence the rented property sector

Andrew Le Mesurier is the manager of Northwood in Market Harborough, based at Harborough Innovation Centre.
Andrew Le Mesurier is the manager of Northwood in Market Harborough, based at Harborough Innovation Centre.

It’s swings and roundabouts for the rented sector following the Budget.

With rental stock already in short supply as a result of recent rises in property sales, it was hoped the latest Budget would bring some hope to the rented property sector.

There appear to be mixed feelings though as many would-be landlords were hoping for a rise in stamp duty thresholds which would have helped them onto the investment property ladder.

However, savers close to retirement will be encouraged at the prospect of being able to invest their pension pot without having to buy an annuity and thus consider the rental market as a more secure place to invest.

The Association of Residential Letting Agents’ latest report released on Monday last week shows a further drop of 13 per cent in the number of letting agents seeing an increase in property transferring to the rental market due to not being sold.

This is the fourth consecutive decrease and is visible locally in Harborough in the high number of enquiries received for rental property as there is simply not enough rental stock to match demand.

An adjustment in stamp duty thresholds might have stimulated an increase in investment for the buy-to-let sector and perhaps lessened the decline in new rental properties coming onto the market.

Despite the increase in house sales this year, there are still many who cannot yet afford to get onto the ladder and with demand exceeding supply, an increase in buy-to-let investors would have added to the properties available and helped to keep rent levels under control.

On the other hand, with the reforms for pensions also announced, it is hoped more people approaching retirement will consider property as a safer place to invest their pension pots.

People aged 55 and over will soon be able to withdraw their entire pension as a lump sum and with the property market increasingly being seen as a lower risk alternative to pensions, more senior investors will hopefully choose to invest in rental properties.

This could counter the possible decrease in buy-to-let investors deterred by the stamp duty thresholds.

So at this stage, it is difficult to forecast how the rental market will perform, however, for the immediate future it seems the trickle of new rental properties entering the market will continue.

We hope this will increase as investment in the Market Harborough area continues but only time will tell.

Column by Andrew Le Mesurier. Mr Mesurier is manager of Northwood Harborough, based at Harborough Innovation Centre.

Follow the firm on Twitter, @NorthwoodMH.