It is Economics 101 - if supply falls while demand remains the same then price will increase.
So the pressure on buy to let landlords is forcing many out of the market but there is still a demand for rental accommodation so this forecast comes as no surprise.
The increase in SDLT has been effective in reducing entry into the BTL market and had that been all the Government had done then the supply would have remained the same but the pressure on interest deduction against income tax is squeezing those already there. Reducing the BTL stock while it is so difficult for buyers to raise a mortgage can have only one consequence - rent increases.
Institutional investors are already becoming major investors in the PRS market and one possible upside is that this may generate further interest in the sector as yields increase. That may in due course even things up again but it is not going to happen quickly and in the meantime tighter budgets for renting property in an age of low wage inflation will make life tough for many people.
Rent prices could rise by 15% in the next five years as the Government squeeze on landlords forces them to sell up, surveyors have warned. The Royal Institution of Chartered Surveyors said letting agents reported a drop in rental properties coming to market for the 21st consecutive month in July. Surveyors thought rents would rise slowly over the next 12 months, then keep rising for at least another four years as the crackdown on buy-to-let owners meant fewer homes were being rented out.
https://www.egi.co.uk/news/rents-set-to-rise-15-as-buy-to-let-crackdown-forces-landlords-to-sell/?cmpid=NLC|EGIx|EGDAM-2017|glob&sfid=701w0000000wsbx
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