The introduction of new energy efficiency standards for buy-to-let properties have caused a slump in supply of rental accommodation in February, a report has indicated.
According to ARLA Propertymark, the professional body for letting agents, the number of homes available to tenants dropped along with demand from renters.
Supply has not been this low, said ARLA, since May 2016 and it suggested many landlords were taking their properties off the market to make changes before the energy efficiency rules came into force on April 1st.
From this date, all newly-let rented properties must comply with new Government standards to ensure tenants have better quality and more suitably-insulated homes.
Each buy-to-let will need a minimum Energy Performance Certificate (EPC) rating of E. Any landlord whose properties to do not meet the requirements will either face fines of up to £4,000 or lose money on empty properties whilst they make the upgrades.
David Cox, chief executive of ARLA Propertymark, said he thought the dip in supply indicated landlords were ‘cutting it fine’ and altering properties before the deadline.
He added: “We could see up to 300,000 properties taken off after the deadline passes on Sunday because they don’t reach the minimum requirements.
“This is also likely to push the rent costs up as competition heats up among prospective tenants. We could have a supply crisis on our hands and for landlords who haven’t yet started to upgrade their properties, now is the time to act and fast.”
According to ARLA Propertymark’s February Private Rented Sector (PRS) report the number of rental properties letting agents managed fell by 5% in February, with 175 on average per branch compared to 184 in January.
Meanwhile letting agents registered 61 prospective tenants per branch in February compared to 70 in January. This 30% decrease in demand suggested the new year rush for homes was over said the report.
In terms of prices, the report showed 25% of tenants had their rents increased, compared to 29% in February 2016 and 31% in February 2015.
