New minimum energy regs hitting rental supply in UK
The number of homes available to rent in the UK fell in February to a 21 month low which agent say could be due to the new minimum energy standards that come into effect on 01 April.
Indeed, landlords are so behind in getting their properties ready for the deadline that hundreds of thousands more could be taken off the market if they don’t meet the requirement, according to the Association of Residential Letting Agents (ARLA).
Overall rental properties letting agents managed fell by 5% in February with 175 on average per branch compared to 184 in January, the lowest level since May 2016 when it stood at 171.
The monthly data from ARLA also shows that a year ago letting agents managed 183 properties on average per branch, 176 on average in February 2016 and 184 on average per branch in February 2015.
Demand for rental accommodation also dipped in February. On average, letting agents registered 61 prospective tenants per branch in February, compared to 70 in January, a 13% fall.
Some 20% of tenants, one in five, experienced rent hikes February compared to 19% in January and down from the 25% recorded in February 2017, 29% in the same month in 2016 and 31% in 2015.
According to David Cox, ARLA chief executive, the drop in the supply of rental properties should not be a surprise as the minimum energy efficiency standards come into effect in April meaning all rental properties must be EPC rated E or above.
‘The dip in supply indicates that landlords are cutting it fine and taking their properties off the market to make the necessary changes before the deadline but we could also see up to 300,000 properties taken off the after the deadline passes on Sunday because they don’t reach the minimum requirements,’ he warned.
‘This is also likely to push 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,’ he added.