9:40 AM, 30th September 2022, About A year ago
Chancellor Kwasi Kwarteng is being urged by one landlords’ organisation to adopt a cost-of-living plan for the private rented sector as tenants and landlords face ever-growing costs.
The National Residential Landlords’ Association (NRLA) has written to the Chancellor warning that while private rents are increasing by less than inflation, it is rising energy, food and other bills that will mean tenants will struggle to pay rent.
The NRLA is also warning that landlords are struggling.
The letter comes as the estate agency Hamptons has concluded that the impact of rising interest rates on mortgages raises the prospect of landlords making a loss on their properties.
Although Government data shows that landlords mostly prefer to keep rents the same to retain good tenants, in its letter, the NRLA notes that contrary to popular belief most landlords cannot shoulder the cost of rising prices indefinitely.
It points to official data showing that 69% of private landlords are basic rate income taxpayers.
The NRLA is calling on the Chancellor to adopt its plan for the sector, to be financed by a reported £1.5 billion underspend in budgets at the Department for Levelling Up, Housing and Communities. The plan includes:
Reforming the benefits system to prevent rent arrears in the first place. This should include:
Extending access to emergency housing support (Discretionary Housing Payments) to those not in receipt of benefits
Scrapping the £400 Energy Bills Support Scheme payment, and instead repurposing the money, paying it direct to every household in one go, for them to use towards the increased cost of living.
Addressing the supply crisis in the private rented sector – the biggest driver of rents.
According to Rightmove, in the second quarter of the year, demand for private rented housing increased by 6% compared with the year before. Over the same period, the number of available properties was down 26%. The NRLA says that the Chancellor should therefore:
Ben Beadle, the NRLA’s chief executive, said: “Both landlords and tenants are struggling with the cost-of-living crisis. We need a package that supports both to prevent rent arrears and sustain tenancies.
“Our proposals provide a pragmatic way forward that would have an immediate and positive impact on the private rented sector.
“We call on the Chancellor to act as a matter of urgency.”
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