Nearly half a million properties could be left unavailable for residents looking to rent in the private rented sector as more landlords exit the market and move into short-term lets, according to a report by ARLA Propertymark.
In its ‘Impact of Short-Term Lets’ report, ARLA Propertymark looked at the scale of Great Britain’s short-term lets sector and the wider implications on the private rented sector.
Landlords are set to exit the market due to a raft of legislative changes.
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The report revealed that 16% of adults have let out all, or part, of their property at least once in the past two years, which is the equivalent of 8.2 million people.
This suggests that 4.5 million properties, or 19% of the UK’s housing stocks, have been used for short-term lets.
The findings also show that 16% of landlords said they only offer short-term tenancies and a further 7% offer both short and long term lets.
Of the overall landlord population, 2.7% have changed from long-term tenants to short-term lets which equates to 46,000 properties that have already been made unavailable for those looking for a home.
Nearly half (46%) of landlords that offer short-term lets do so to enjoy more flexibility in how they use their property.
The regulations in the long-term letting market was cited by two-fifths (38%) and over a quarter (27%) were encouraged to move to short-term lets because they thought they could achieve higher rents.
One in 10 landlords are reportedly likely to consider a switch to short-term lets.
Based on this figure, ARLA Propertymark calculated that up to 230,000 properties could be left unavailable for tenants if landlords who said they were ‘very likely’ to move to offering short-term lets were to do so.
If this included landlords who stated they were ‘fairly likely’ to make the move, the number of properties rises to 470,000.
David Cox, chief executive at ARLA Propertymark, said: “The growth in short-term lets is particularly concerning for the traditional private rented sector.
“As landlords are continuously faced with increased levels of legislation, it’s no surprise they are considering short-term lets as a chance to escape this.
“Unless the sector is made more attractive, landlords will continue to exit the market resulting in less available properties and increased rent costs.”
David Smith, policy director for the Residential Landlords Association, added: “Today’s report highlights how inconsistent the government’s approach to the rental market now is.
“On the one hand the Ministry of Housing wants to encourage more landlords to offer properties to tenants on a long-term basis.
“On the other hand the Treasury has a tax system which makes renting out holiday homes more appealing at a time when demand for homes to rent is outstripping supply.
“What we need is a tax system that supports and encourages the majority of hard working landlords doing a good job to provide the long-term, quality rental accommodation tenants desperately need.
“We call on the Chancellor to do this in his forthcoming Budget.”