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Ian Colban

November 2016

As we come towards the end of the first quarter of 2017 with the triggering of Article 50 now underway and the ban on tenant fees fast approaching, how is the lettings market across Sussex being affected?

The perception has been that the barrage of attacks on private landlords through Stamp Duty, income tax changes and more and more legislation is likely to slow down the enthusiasm for Buy-to-Let Investment and that this, in turn, will have an impact on the supply of property to the Private rented sector.

Looking at the wider Chichester area and comparing the last 2 months to the same period in 2016, according to Rightmove, the total available stock for the period is virtually identical 369 properties last year to 372 this year. In addition, new instructions (or properties coming to the market as the figure includes those up for re-let) is up year on year by 5% from 215 to 226, and the number of agreed lets is also up 7% from 154 to 165. All of which seems to suggest that the market has been pretty much unaffected by all the external influences.

Anecdotally, however, the conversations being had with Landlords tell a different story, there has been a marked slowdown in BTL investors purchasing new investment property across the county and several members are reporting that they are having more frequent conversations with landlords questioning whether they want to continue to rent out their properties. Concern over possible increased fees once tenant fees are banned, additional costs from EICR and EPC changes, on top of the additional tax burden appear to be chipping away at Landlord confidence.

Certainly, the feeling is that whatever the future holds rents will continue to rise. Significant increases are being reported in various pockets across Sussex largely driven by supply and demand. The popular opinion that is being repeated regularly is that if and when tenant fees go, the costs will be shifted to the landlord forcing rent to rise even faster. I am not so sure it will be as direct a correlation as that.

As members will be acutely aware we are in a highly competitive market with (too) many agents fighting over the business. If landlords are faced with increased fees they will become even more selective over the agent they chose and as we know, as much as we like to think it is our excellent service that differentiates us, most Landlords are cost driven. They will seek out the lowest fees, reduce their level of service, look to manage properties themselves or pull out of the market completely. If enough landlords follow this course and supply drops even further it is this that will force rents higher. Tenants could therefore potentially lose out both in higher monthly rents and less professionally managed properties.

The challenge is to promote the Propertymark brand across the county as a benchmark to both Landlords and tenants alike of fairness, security and service.

Ian Colban MARLA
ARLA Propertymark Regional Representative