Landlords are quitting the PRS because of Government ‘indifference’

Landlords are quitting the PRS because of Government ‘indifference’

11:25 AM, 2nd March 2023, About A year ago 7

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A property expert has slammed the government’s ‘indifference’ for the growing crisis in the private rented sector (PRS) as landlords flee and fewer investors step in.

That’s the view of Jonathan Rolande of the National Association of Property Buyers.

He said: “Landlords are in the peculiar position of being a minority apparently hated by all sides.

“Those struggling to buy their own home often blame them for pushing up prices, having created scarcity in the market.

“Tenants see them as profiteering from the crisis in housing, pushing up rents needlessly and being slow to spend money on repairs.”

Lack of government support for landlords in the PRS

He says there is a lack of government support for landlords in the PRS and explained: “The government seems to view them with indifference neither supporting them nor providing any kind of strategy to make them unnecessary.

“There is an attitude of ‘Well, if they don’t want to be a landlord, someone else will’, which means many are choosing to quit the sector already disgruntled by legislation that has made the business of renting out property far less profitable.

“It’s also a legal obstacle course where minor errors can trip up the unwary, often with huge financial implications.”

‘EPC changes will cost many landlords dearly’

Mr Rolande also says that forthcoming regulations will only make the situation worse and said: “With more legislation on the way – EPC changes will cost many landlords dearly – it is hard to see why anyone would still want to buy-to-let given that there seems little prospect of capital growth and returns.

“In their rush to re-balance the market in favour of tenants and home buyers, the government seems to have overlooked an important point: owner-occupiers pay more than landlords.

“Partly because of tax breaks, higher loan-to-value mortgages and lower interest rates, owners will almost always outbid an investor buyer.”

‘Much-needed homes disappear from the rental market forever’

The result will see more homes being removed from the PRS and Mr Rolande explains: “We may soon end up in a situation where much-needed homes disappear from the rental market forever, before any housing stock has been built to replace it.

“Already beleaguered tenants will face fewer choices and inevitably, higher rents.

“With landlords facing this death by a thousand cuts policy, it seems once again that it will be those that can least afford it and have the fewest options that will suffer in the end.”

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northern landlord

13:16 PM, 2nd March 2023, About A year ago

I don’t think the Government are indifferent to the PRS. They are actively setting out to destroy it by bolstering tenant rights even more by introducing yet more new regulations especially the banning of section 21 that essentially takes away a Landlord’s control of their own property. Why are they doing this? According to the Rugg and Davies report ”The Evolving Private Rented Sector” (2018) “For well over a decade a stated goal for the PRS by successive English governments has been to encourage large scale institutional investment in new properties built specifically for the rental market” It’s just like Tesco’s squeezing out the corner shop but being aided by the Government to do it. Problem is the Government’s corporate buddies are not building fast enough so won’t match the landlord exodus and in any event they are not interested in poorer tenants with cheaper rents who will be the first to go as already poor returns for landlords in this area will disproportionately encourage (force) them to sell up or drastically increase rents to stay afloat, although the writing is on the wall that the rent increase option may not be available for much longer if people like Andy Burnham get their way or Labour get in.

Grumpy Doug

13:39 PM, 2nd March 2023, About A year ago

Reply to the comment left by northern landlord at 02/03/2023 - 13:16
To clarify, as of end 2022 there were about 120,000 BTR units built or under construction. A further 120,000 either at detailed application or long term planning, so less than 250k units visible in any way.
The PRS is approx 4.3m units at the moment so the BTR sector is currently about 5% at best if you count the units that are in plan. Less than 3% if you only count the existing units and those under construction.
So HMG, you are truly up the creek without a paddle if you're relying on your corporate buddies to fill the gap. And let's not forget, a lot of these projects will have entered the early playing stages pre COVID. With the cost of materials and the scarcity of tradespeople now, many will just never get off the ground at all .... ever!

Luke P

15:15 PM, 2nd March 2023, About A year ago

No matter how much Govt. try to advantage them, their corporate buddies will only ever build if (financial) returns are favourable. Problem is, Govt. have made their policy known and the current solution to housing the nation (the PRS) are spooked and already one foot out of the door. The UK is well and truly knackered and I don't say that glibly; it will take many generations to recover the damage already done, even if we started now (and that's before Labour get their idealogical hands on the levers of power)...

Bristol Landlord

18:19 PM, 2nd March 2023, About A year ago

I disagree with the author’s premise, the Govt is not “indifferent” to landlords, it is in fact extremely interested in us in so far as it is actively and deliberately, with great maliciousness, driving Independent Landlords out of the PRS.
I would agree with previous comments that it is not doing this to “improve” the conditions for renters, a very cynical lie indeed, but in order to favour Minister’s mates in the private BTR sector. Presumably down the road there will be seats on the board etc for these Ministers.
It is time the Govt was called out on its actions and motivations, perhaps a Judicial Review into Govt misconduct in its harassment and persecution of Landlords could be a possibility?

Steve Masters

13:52 PM, 3rd March 2023, About A year ago

At first glance I honestly thought the article title read:

Landlords are quitting the PRS because of
Government ‘interference’

Sadly, this is actually far more accurate.

Martin Roberts

19:15 PM, 3rd March 2023, About A year ago

Yep, not ‘indifference', it is declared government policy to drive small landlords out of the business.

It’s working.

Hamish McBloggs

9:41 AM, 4th March 2023, About A year ago

I don't believe it to be indifference.

I'm in three minds here.

1. Total incompetence. Failure by the leadership and those paid to think deeply for government to understand the consequences of actions and to plan.

2. Total arrogance. Short term vote winning tactics by individuals and groups. Open government deaf to all but donors.

3. A carefully thought through strategy being executed with significant success. A strategy to eliminate all but the most tenacious small landlord and create only larger organisations with deeper resources.

I would be genuinely impressed if the third option were true.

I suspect a combination and varying shades of the first two.


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