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Warning bells as rental numbers plunge

The UK's housing crisis could be deepening following a report which shows a shortage of new private rental properties on the market.

The Royal Institution of Chartered Surveyors' (RICS) latest residential market survey reported a decline in the number or rental properties available.

Its monthly monitor produces a net balance figure, with a negative figure meaning that respondents saw a drop in new rental properties.

November's figure slumped to -29%, down from -21% in October and more than double the -14% figure recorded in November 2018.

As demand from tenants shows no sign of slowing down and tax changes affect rental profits, RICS predicted rental prices will increase by 2% in 2020.

A series of tax changes implemented over the last three years have nibbled away at the profits of buy-to-let landlords.

A 3% stamp duty surcharge was introduced in April 2016, followed by the phased reduction of mortgage interest relief for landlords.

By April 2020, residential landlords will be unable to deduct any of their mortgage expenses from their taxable rental income.

Instead, landlords will receive a tax credit based on 20% of their mortgage interest payments.

David Smith, policy director for the Residential Landlords Association, said:

"If the decline in the supply of new homes to rent continues to fall while demand is still rising, this is going to lead to a crisis in some areas as tenants desperately search for somewhere to live.

"This is all the result of increased taxation and other measures over the last three years and the result has been highly predictable as we said it would be."

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