Are tenants beginning to see the problem of landlords leaving?

Like Thelma and Louise hurtling towards the cliff edge, more people are beginning to see the problems coming with the Renters’ Rights Act.

Thankfully, tenants are now asking why landlords are leaving and why rents are rising.

I say that after reading the comments under a BBC story this week about rents topping £1,000 a month across more than half of Britain’s neighbourhoods.

The story appeared on Property118 too, but the Beeb’s version didn’t just attract the predictable landlord-bashing.

But sadly, much like Thelma and Louise, I suspect we are already too close to the edge to slam on the brakes and save the private rented sector in its current form.

Zoopla’s research shows the average rent for a new tenancy is now more than £1,000 a month in 52% of British neighbourhoods, up from just 23% in 2020.

Rents have risen 36% over five years. Wages have increased too, though nowhere near enough to keep pace.

Rental supply shrinking

Predictably, the commentators said this was bad because landlords are simply charging more.

However, instead of a pile on of others agreeing that landlords are raking in cash for doing nothing (!), I was struck by a new narrative.

It is probably being driven by growing numbers of tenants discovering the basic economics of supply and demand as they try to find somewhere to live.

Several pointed to something landlords have warned about for years: thousands are selling up.

When supply shrinks but demand stays strong, rents rise. That is not ideology; it is arithmetic.

There was even a nod to the rising costs for landlords, from mortgages to tax and regulation, which inevitably land with the tenant at the end of the line paying more.

For years this argument was dismissed as special pleading from landlords protecting their interests.

But now renters themselves are beginning to feel the consequences.

Who replaces selling landlords?

One tenant explained that their landlord had increased the rent by £150 a month after being forced to pay for professional compliance advice.

Others raised the longer-term structural problem: if smaller landlords exit, who replaces them?

In many cases the answer is not first-time buyers.

It is increasingly likely that institutional investors, property companies or cash buyers expanding portfolios will be stepping in.

And more tenants appear to be appreciating what small landlords offer, rather than faceless corporations.

No one defends rogue landlords or poor housing standards, but government policy often has unintended consequences, particularly when it collides with economic reality.

Young people are struggling

Young people are being hit from all sides: high rents, high house prices and large student debts.

For many of them, renting privately is not a lifestyle choice since it has become the only viable housing option.

If the market continues to shrink, the consequences extend far beyond landlords and tenants.

Labour mobility suffers and graduates cannot easily move cities for work.

Their disposable income drains away into housing costs rather than the wider economy.

And yet much of the political conversation continues to treat landlords as a problem to be eliminated rather than being part of the housing system.

What replaces the small landlord?

The irony is brutal and the very people the Act was meant to protect are about to discover that ‘corporate’ and ‘institutional’ landlords are remote and slower to fix things.

Councils and housing associations leave some properties dangerous for years, yet the narrative is that every private landlord is a pantomime villain.

The Act will see more landlords heading for the exit, rents will keep climbing but tenants are starting to speak.

They can see what is happening now, and that’s without the struggles facing landlords after May’s implementation of the Act.

All tenants need to understand that this crisis was made in Westminster, not by the people who actually provide the homes.

Demonise productive capital and watch it vanish.

The unintended consequence is staring us in the face: fewer homes, higher rents and a generation locked out.

And like Thelma and Louise discovering gravity at the edge of the canyon, the laws of supply and demand have a habit of asserting themselves whether politicians believe in them or not.

Until next time,

The Landlord Crusader