Oversupply hits buy-to-let demand

Published: December 19, 2007

An oversupply in rental flats has contributed to a slow-down in demand within the buy-to-let sector, according to new figures published yesterday (December 18th).

Tenant demand for rental flats rose by 16.9 per cent in the past three months, compared to an increase of 36.9 per cent over the previous quarter, the figures from the Royal Institute of Chartered Surveyors (Rics) revealed.

The slowdown was further illustrated by a decline in the number of surveyors reporting a rise in tenant lettings and not a fall, with 20 per cent doing so last quarter, compared to 28.5 per cent in the preceeding three months.

Rics spokesman, Jeremy Leaf, said: "'A combination of tightening lending criteria and successive interest rate rises has started to hit the buy-to-let market."

"But with the drop in capital gains tax due in April, many landlords are resisting selling until spring," he added.

Earlier this week, figures published by Hampton International revealed a 26 per cent fall in the number of buy-to-let mortgages taken out on new purchases in November, with re-mortgaging of buy-to-let properties increasing by 6.2 per cent over the same period.