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10:58 AM, 13th December 2021, About 2 years ago 56
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Councils warned today of a growing crisis in the private rented housing sector, with a sharp rise in landlords selling up or converting their properties into Airbnb’s. The District Councils’ Network that represents over 200 councils conducted a snap survey showing 76% of councils have seen an increase in landlords selling up properties.
Shortages are particularly bad in councils areas popular with tourists, with landlords switching their properties to more profitable short term holiday lets.
76% of councils surveyed by the District Councils Network (DCN) said that this had caused a rise in housing waiting lists, causing more people to lose homes, and making it harder to find permanent accommodation for those in need. 48% of these councils said they were now experiencing significant pressure on housing services due to this.
One council in a popular tourist destination in the south-west of England has reported a nearly 80% drop in the number of open market, long term rental accommodation available in their local authority area over the last three years, with many landlords leaving the market or providing short term accommodation for holidaymakers instead.
This news comes at the same time as a report by property agent Zoopla revealed that rents in the private rented sector have reached a thirteen year high, with a 6% increase in the last year. Councils are reporting that this rise is forcing some long term tenants to apply for hardship support from their local authority, with some council areas seeing rents rise to over a third higher than the average salary in their local area.
Councils are warning that the housing benefit many suffering hardship receive will likely not be sufficient in the longer term, as the Government looks set to keep Local Housing Allowance rates, which determines the amount of benefit received, frozen over the next year.
Landlords are leaving the market due to the impact of the pandemic, with tenants unable to afford their rents, landlords requiring to move into a property themselves and a rise in ‘staycations’, leading to a boom in the short term holiday let market.
The District Councils Network, who represent nearly 200 district councils across the country, is calling on the Government to increase investment in council housing and give councils the tools they need to create their own permanent housing for people in their communities in hardship.
District councils stand ready to work with the government to proactively increase the supply and quality of homes for benefit claimants, ensuring those in need can have a permanent roof over their heads in their local communities in the future.
Cllr Sam Chapman-Allen, Chair of the District Councils Network said: “This survey reveals a perfect storm of problems creating a crisis in the private rented sector across the country.
“Now the Government’s Eviction Ban has ended, this is a problem that could get worse, with councils also seeing increase in the numbers of tenants needing housing support due to increased evictions due to rent arrears.
“During the pandemic, district councils and the government worked together to help protect those who are most vulnerable through the Everyone In initiative, the temporary banning of no-fault evictions, and other measures such as furlough and the Universal Credit uplift.
“We need to urgently tackle this issue by permanently lifting housing benefit for tenants in private rented housing and for increase in Government support to invest in a renaissance of council house building to create homes, jobs and growth.”
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SCP
12:47 PM, 13th December 2021, About 2 years ago
Reply to the comment left by David Price at 13/12/2021 - 12:34
Agreed.
I was trying to point out the misleading nature of the statistics used uncritically or without stating the background.
LAs will have contact with the LL via licensing, and we are not told how many do not require licensing and are in the private housing sector.
Lending figures on their own do not tell us much other than liquidity.
SCP
12:47 PM, 13th December 2021, About 2 years ago
Agreed.
I was trying to point out the misleading nature of the statistics used uncritically or without stating the background.
LAs will have contact with the LL via licensing, and we are not told how many do not require licensing and are in the private housing sector.
Lending figures on their own do not tell us much other than liquidity.
Gromit
13:27 PM, 13th December 2021, About 2 years ago
Reply to the comment left by MarkT at 13/12/2021 - 11:28
When Sec.24 became law (and each year since) I asked my Local Council what plans did they have for the impending reduction in availability of houses in the PRS. The answer each time was we have no plans, and their only concern was the next FY.
Reap was you sow (or more precisely there's nothing reap as they didn't sow anything).
Reluctant Landlord
13:28 PM, 13th December 2021, About 2 years ago
They reap what they sow...
Vilify the private sector right to the edge of reasoning...and don't be surprised when people jump before being pushed.
Gromit
13:41 PM, 13th December 2021, About 2 years ago
Reply to the comment left by GraemeG at 13/12/2021 - 11:35
The Government will not act until it ACTUALLY becomes a crisis (this was from my local Tory MP who was a minister at the time). And a crisis that will lose them votes.
By then of course it'll be too late. Many Landlords will have left the PRS never to return. The Govt will have to give massive inducements to tempt people to become Landlords.
Freda Blogs
13:42 PM, 13th December 2021, About 2 years ago
Quoted elsewhere regarding this news item:
Eleanor Bateman, Policy Officer for Propertymark, commented: “Concerns over a shrinking private rented sector is not a new conversation, but it is one that is not being acknowledged.
"If the situation continues to be ignored by decision-makers fixated on taking a piecemeal approach to legislation we shouldn’t be surprised if the number of people on housing waiting lists skyrockets.
"With the removal of Section 21 on the table, unrealistic energy efficiency targets, and the attraction of short-term letting, the UK Government will find that the private rented sector continues to diminish, and homelessness will rise. The sector needs high standards and regulation, but it must work for both landlords and tenants.
"As we await their Renters’ Reform White Paper, it’s imperative the UK Government recognises that the balance has swayed too far. There are too few incentives for investors in the private rented sector, and regulatory and tax levers must be reviewed to avoid unintended consequences."
Someone with some common sense. Lets hope Govt is listening.
Graeme
13:49 PM, 13th December 2021, About 2 years ago
Reply to the comment left by David Price at 13/12/2021 - 12:34
I agree. Different parallel metrics. Reminds me of my maths days "correlation does not imply causation". One potential reason that buy to let mortgages have increased is re-mortgages. Re-mortgaging is an effective way of increasing free cash flow in a business and maximising return on equity. If the cash is then used to invest into other asset classes outside of property then it's diversifaction of equity that can mitigate risk and achieve even higher levels of return on equity. With recent and relatively high percentage increases in residential property prices the benefits of re-mortgaging have also increased.
Graeme
14:02 PM, 13th December 2021, About 2 years ago
Reply to the comment left by Freda Blogs at 13/12/2021 - 13:42
Whilst this is a bleak forecast, it's also one I agree with. Things are going to get worse for everyone, including, government, landlords and renters, before it gets better. I can often reconcile win/lose outcomes but not lose/lose/lose outcomes. The government will end up with a homeless and social problem, landlords will have less healthy businesses and lower incomes and renters will find it increasingly difficult to find homes and they will be at above inflation cost. Last week I had an opportunity to buy an apartment that I had previously renovated and sold five years ago. My financial modelling placed this into the "avoid" category from a financial return perspective. This is in a relatively wealthy and socially sound place with a strong rental demand. A mixture of (i) stamp duty, (ii) high mortgage interest rate on commercial mortgages and (ii) legal purchase and mortgage arrangement makes it a distinctly unattractive financial investment. I can buy in-bond whisky casks with 10% - 15% p/a return that are capital gains tax free and don't require any personal time to manage.
TheMaluka
14:09 PM, 13th December 2021, About 2 years ago
Reply to the comment left by Gromit at 13/12/2021 - 13:41
The crisis will come when ALL landlords refuse to accept tenants who have insufficient income and safeguards. Start by asking prospective tenants for their credit report and a guarantor.
Reluctant Landlord
14:40 PM, 13th December 2021, About 2 years ago
Reply to the comment left by GraemeG at 13/12/2021 - 14:02
the way things are going its going to turn LL to drink...maybe a good time to invest in this venture then...lol!