This is the end of a very busy week for us here at Landlord Law where we have been at the Landlord Conference in Coventry.
It was great seeing so many of our members face to face at what was a very productive and informative event.
So, let’s see what else has been happening this week.
Thursdays Autumn Statement
Yet another fiscal event, but hopefully one that will cause less havoc than Ms Truss’s ill-fated event a few weeks ago. However, it is obviously not going to be an easy time going forward.
There were a number of industry reactions set out in the Negotiator.
The general feeling did not appear to be massively unfavourable. Although Ben Beadle, CEO of the NRLA, felt that not enough had been done on boosting supply in view of the fact that demand is massively outstripping supply in the PRS.
Government laws break PRS
NRLA has hit back at the government telling them that they are to blame for the dire state of the private rented sector through a constant barrage of law changes and regulations, and they are responsible for the reduction in supply forcing landlords out of the sector. The NRLA goes on to say that since 2015 the government has ’embarked on a deliberate effort to discourage investment in private rented housing’.
In a statement which you can read more here the NRLA says this has included measures to restrict mortgage interest relief and imposing a three per cent stamp duty levy on the purchase of homes to rent out. NRLA also draw a link to official government figures, which show the number of houses has fallen by over a quarter of a million in the past five years whilst demand from tenants continues to increase rapidly.
Ben Beadle Chief Exec of NRLA said
The government’s strategy for the private rented sector lies in tatters. The fact that the supply of homes to rent is falling despite an increase in demand is a damning indictment of tax decisions which serve only to increase rents and make home ownership more difficult to achieve.
“Further tax hikes on the sector risk making an already bad situation worse. Ministers need to recognise that a healthy and vibrant private rental market needs to sit alongside, rather than be in competition with, efforts to support homeownership.
LandlordZone posts an article along the same vein, adding that prospective tenants are up by 142 per cent now compared to the five-year average, according to Zoopla.
‘No’ to rent controls
Speaking at the Landlord Conference this week in Coventry, the new PRS housing minister Felicity Buchan said that her government would never bring in rent controls.
She has further accepted the NRLA’s proposal to tackle anti-social behaviour by tenants by convening a meeting of key stakeholders of landlords, tenants, police and local authorities to develop plans to ensure anti-social tenants can be dealt with effectively and direct action can be taken.
Ben Beadle, Chief Exec of the NRLA said
The NRLA has made clear that more needs to be done to ensure the behaviour of anti-social tenants can be tackled effectively when Section 21 goes. We therefore welcome the Minister’s acceptance of our proposal for a roundtable on the issue.
It is vital that all key stakeholders representing landlords, tenants, the police and others can develop clear and workable plans to ensure neighbours and fellow tenants alike are not left at the mercy of nightmare tenants.
Agent calls out revenge evictions
Ajay Jagota, founder of ‘Very Wise Student’ who also used to be a letting agent, has said that many tenants fear revenge eviction if they report any safety risks that require repair work to their landlords. Jagota, who has made his very strong views known in the past, says
Fire safety is quite obviously a non-negotiable, and one of Very Wise’s many free services for students is a free student accommodation safety check – helping student renters protect their rights, but more importantly keeping them safe.
It’s not unsurprising too to hear that so many renters aren’t even bothering to report maintenance issues to their landlords and letting agents as they assuming nothing will be done. But most repairs are not optional – and if they can’t get then carried out alone, we’re here to help.
You can read more here.
Landlords quitting the market
There seems to be a general theme emerging out of the PRS in recent months as LandlordToday reports that more and more landlords are quitting the market. Handelsbanken Bank has run some research that says 60% of landlords will be increasing their rents to compensate higher costs, a fifth will be selling some or all of their portfolios to combat the cost of living crisis, whilst a third say they will be trying to make their rentals more energy efficient.
Almost all landlords say the current market outlook has impacted their portfolio/ investment strategy in some way, with just over half concerned they will experience longer voids. This is also due to the increase in mortgage rates.
James Sproule, TK Chief economist at Handelsbanken says
The property market is entering a period of increasing uncertainty, with house prices in some areas already falling and a rising regulatory burden being seen by some landlords as a reason to reduce their exposure to the market.
While the ongoing cost of living crisis might be seen as the driving factor in the buy to let market, equally important are the post-pandemic movement back into cities, potential buyers delaying purchases and thus looking to rent, and fewer properties, meaning those who do persevere, are likely to see higher yields. Savvy landlords are using the changes to stamp duty to cost-effectively reshape their portfolios and invest in energy efficiency, something which has become an ever greater concern of potential tenants.
Landlords are not to blame for Section21 rises
Generation Rent are saying that private renters are now under more ‘stress like never before’ as evictions rise rapidly with the no-fault Section21 eviction process being used. Deputy Director Dan Wilson Craw says
Private renters are under stress like never before. The rising cost of living has pushed thousands into rent arrears, who now face homelessness as their landlords seek eviction, even staying on top of rent is not enough for other renters, whose landlords are using Section 21 eviction notices to force them out without needing a reason. These properties will often end up back on the market at a much higher rent.
Paul Shamplina an expert in tenant evictions, disagrees with Generation Rent’s claim saying
Despite the data showing that evictions and Section 21 notices have surged recently, they continue to be at very low levels compared to the millions of households within the private rented sector – our figures suggest this year some 6,000 people will be evicted via Section 21 notices by private landlords.
We also know that an unprecedented number of landlords are selling up; 26% of landlords that served a section 21 through landlord action during the past 12 months did so because they are exiting the market.
Generation Rent is calling on the government to freeze rents and suspend no-fault evictions. You can read more here.
Newsround will be back next week