Covid-19 Bounce Back loans for property businesses16:06 PM, 5th May 2020
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If the government isn’t careful there is the potential for a real property catastrophe on the horizon as if they proceed with the removal of the so called mortgage relief for landlords which is likely to result in many landlords leaving the market then the housing situation will be further exacerbated if the following Inside Housing extract is true with housing associations moving away from what they term as sub-market rent.
Nearly one in three English housing associations are likely to stop entering new deals to build homes for sub-market rent.
An exclusive Inside Housing survey of 135 chief executives reveals the extent to which the 1% annual social housing rent cut will prompt a dramatic change in the sector. 31.9% of association chief executives said as a result of the rent cut, it is likely their organisations will stop entering new agreements for sub-market rent, with 11.1% saying it is ‘extremely likely’.
The survey also revealed landlords are likely to build more homes for sale, with nearly 73% saying it is likely low-cost home ownership and market sale will make up a greater proportion of their future pipelines. This suggests landlords were already planning a shift into ownership ahead of the publication on Tuesday of the Housing and Planning Bill, which outlined measures to promote the tenure.
Gavin Smart, deputy chief executive of the Chartered Institute of Housing, said: “Building new homes – especially those at sub-market rents – is resource-hungry and for some landlords it won’t be possible to continue current levels of development.”
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