Capping rents will cause landlords to leave PRS warns industry body

Capping rents will cause landlords to leave PRS warns industry body

0:03 AM, 7th September 2023, About 8 months ago 11

Text Size

An industry body warns that capping rents will only deepen the current rental crisis.

The National Association of Property Buyers (NAPB) says capping rents would lead to a “stampede” of landlords quitting the sector.

They are urging the Government to look at increasing Local Housing Allowances to ease pressure in the sector.

Capping rents isn’t a silver bullet

Spokesman for the NAPB, Jonathan Rolande said: “Capping rents isn’t the silver bullet some think it is – many landlords are already quitting the sector as they are finding it hard to turn a profit.

“Capping rents on a large scale would lead to a stampede to sell, reducing the supply even further.”

Mr Rolande is calling for an end to the freeze on local housing allowance (LHA).

“An immediate increase in the Local Housing Allowance, frozen for the last three years, would help tenants meet their rental commitments in the short term.

“However, given that the rental sector is a free market, any increase in the money available could inevitably lead to further increases in rent demanded. So it should also be seen as what it is – a double-edged sword.”

Take decades to put right

His comments come after figures showed people living in the most deprived areas of the UK have seen their rents skyrocket.

Figures from Hamptons reveal, in 2019, renters in the most deprived regions were paying an average of £499 a calendar month – by 2023, that had shot up to £759.

Mr Rolande says that the rental crisis problem has been a long time in the making.

Mr Rolande continued: “In simple terms, property is just a question of supply and demand. Landlords are able to push up rent as there are too many tenants chasing too few properties. What is the solution?

“Unfortunately, like so many of the major problems affecting the UK, this has been a long time in the making – low wage growth, a lack of social housing and an undersupply of newly built homes for decades will, in turn, take decades to put right.”


Share This Article


Comments

Easy rider

13:44 PM, 7th September 2023, About 8 months ago

There can be no stampede to leave the PRS. Any stampede would need to begin with a whole load of court cases for possession; this would act as a funnel to control the number of properties coming to market.

Prices of ‘vanilla’ BTL properties would tumble and landlords would choose to keep them rather than sell ‘at a loss’,

Old Mrs Landlord

16:56 PM, 7th September 2023, About 8 months ago

Reply to the comment left by George Pearson at 07/09/2023 - 13:44Unfortunately, if their choice is sell at a one-off loss or continue to let at a mounting ongoing monthly loss most landlords will simply have to bite the bullet and sell or have the properties repossessed and/or go bankrupt.

northern landlord

17:19 PM, 7th September 2023, About 8 months ago

Reply to the comment left by George Pearson at 07/09/2023 - 13:44
George you are right about the Courts slowing a stampede of landlords evicting tenants in order to get out of the PRS. We don’t need a stampede a sustained trickle will suffice if goes on long enough. Most published evidence indicates the trickle is well under way. What percentage of PRS homes need to disappear before the housing system is in total crisis with thousands of homeless who cannot afford to rent or buy living in cardboard city shanty towns? I have seen the Dharavi slum in Mumbai, which is possibly the world’s largest slum. I was surprised that many who live in the “posher” parts of the slum (there is a social strata even in slums) have what we would consider as reasonable jobs like teachers, police officers, nurses ,lower grade civil servants, call centre workers etc. who just cannot afford to buy or rent any property in Mumbai but have to work there. It could never happen here could it?

Easy rider

20:11 PM, 7th September 2023, About 8 months ago

Reply to the comment left by northern landlord at 07/09/2023 - 17:19
I’m afraid it really could happen here. Government is overseeing the destruction of what most people would consider to be England.

The problem is always ‘too many people and too few homes’. If the PRS disappeared overnight, there’d be the same number of properties, there’d be the same number of people and there’d be just as many homeless.

Dylan Morris

8:26 AM, 8th September 2023, About 8 months ago

Capping rents for existing tenants is coming I’m sure when Labour get in. The question is will they cap rents for new rentals ? Tenant leaves, property goes on market and essentially a landlord can ask for whatever rent he wants which will get higher and higher due to ever reducing supply. Will Labour cap these rents ?

Old Mrs Landlord

11:04 AM, 8th September 2023, About 8 months ago

Reply to the comment left by Dylan Morris at 08/09/2023 - 08:26
Dylan, please don't put ideas in their heads, they have more than enough of their own!
I would also like to mention that LHA rates have in fact now been frozen for four years rather than the stated three. This is because the increases operative from April 2000 were based on rents from September 2019. These four years have seen some of the highest rates of inflation and increases in landlords' mortgage costs for decades.

Russell Cartner

13:05 PM, 8th September 2023, About 8 months ago

Reply to the comment left by George Pearson at 07/09/2023 - 13:44
I am spending more and more time keeping up with Goverment policies, its come to the point you need to become profesional to avoid very expensive penalties.
The removal of Sec 21 will cause even more court chaos,and at enormous expense to a Landlord
Anti Landlord policies by Governmwnt Looney Left Shelter & Generation Rent (They do not house anyone)
My solictor wouldnt go near rentals with a bargepole
If you do not get out now it will only get much much worse
There is no joy in being a Landlord just pain

Fergus Wilson

8:14 AM, 9th September 2023, About 8 months ago

Capping rent is not the answer!

Capping BOE Base Rate is the answer!

Peter

15:06 PM, 9th September 2023, About 8 months ago

This is all part of the build-up to introducing a mandatory Register for Landlords (not unruly Tenants I might add) for which will there will be a fee of somewhere between £500 and £1200 per property simply to raise money for the cash-strapped or bankrupt Councils who couldn't manage a Pee up in a brewery. Many Landlords will sell up and for the few remaing this cost will have to be passed on to Tenants. Firstly, if you're going to have a register for Landlords then it should be a 2 way street as arguably there are more errant Tenants than there are Landlords. Secondly, we all know there are a few "bad" Landlords and Tenants who need dealing with. However, The Renter's Reform Bill is NOT the answer.

Russell Cartner

15:22 PM, 9th September 2023, About 8 months ago

Reply to the comment left by Peter at 09/09/2023 - 15:06
Sellup worse to come

1 2

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now