More families and older renters downsize as rents soar

More families and older renters downsize as rents soar

0:02 AM, 30th November 2023, About 3 months ago 5

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The rising cost and scarcity of rental homes have forced thousands of families to downsize and older renters to move to cheaper areas, the BBC has revealed.

It has seen statistics from Dataloft, a consultancy firm, showing that nearly half of the new tenancies signed by families earning between £30,000 and £70,000 in the first six months of 2023 were for one or two-bedroom properties.

This is a significant drop from 57% of families who rented homes with at least three bedrooms in the same period of 2020.

The data also shows that renters over 30 years old are more likely to relocate to lower value areas than higher value ones when they move home – suggesting a trade-off is needed to stay within budget.

‘These reductions in renters’ standard of living’

The managing director of Dataloft, Sandra Jones, said: “We believe these reductions in renters’ standard of living to be the direct result of the severe supply constraint that has driven up rents.

“When affordability is stretched, as it is for so many today, people make trade-offs in order to stay within a budget.”

The property portal Zoopla points to a lack of availability of private rented homes was adding to the trend of families taking on smaller properties.

The platform’s executive director, Richard Donnell, said the slower buying and selling market meant greater demand in lettings, so people ‘can only find or rent what is available’.

Greg Tsuman, the president of ARLA Propertymark, said landlords needed more incentives to stay in the sector and raise the number of private rental properties, such as changing the tax system.

He added: “Fundamentally, the problem is that landlords are exiting the market when demand for rental properties continues to rise.

“Landlords are making a loss when rents are rising, and we need to address the root causes if we’re to solve this.”

Affecting the health and wellbeing of older people

The BBC also reports that the National Housing Federation (NHF), which represents housing associations, says the situation is affecting the health and wellbeing of older people, who faced insecure and expensive tenancies.

The NHF is calling for more social housing to meet the demand.

The report highlights that rents are rising, and demand is high but the number of available homes has dropped as some landlords sell up.

The NHF said the number of people aged over 55 who were renting privately in England had soared.

Its survey suggested that 42% of them regularly struggled to cover their basic living costs such as buying food and clothes or heating their homes.

The NHF is warning of a ‘huge spike’ in the number of people entering their pension years who were living in private rented homes they could not afford.


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Comments

Beaver

11:02 AM, 30th November 2023, About 3 months ago

On: “Fundamentally, the problem is that landlords are exiting the market when demand for rental properties continues to rise.

“Landlords are making a loss when rents are rising, and we need to address the root causes if we’re to solve this.”

Putting a safe roof over somebody's head is socially useful and it seems odd to be penalising it.

We were told that the changes we've faced preventing us from deducting our finance costs were to prevent another housing bubble; they seem more likely to be political to me. Some landlords are now finding that they are better off investing in premium bonds, but all that does is enable the government to finance its debt and it doesn't house anybody. We can't deduct finance costs unless we incorporate and we are also not allowed to invest our pension assets in residential housing.

But we need a boom in housing that doesn't produce much CO2 emissions. At the very least we ought to be able to deduct our finance costs of making energy efficiency improvements as operational expenditure and given that we need so much of it I can't see what the problem would be in allowing us to invest our SIPPS in EPC category A properties whether as new builds or retrofits.

Why is it that I can invest my SIPP in petroleum companies, tobacco, any number of activities that put out CO2 emissions: And yet I can't invest it to retrofit a Band D property and make it Band A or build a band A property on land I own in my SIPP?

LordOf TheManor

11:32 AM, 30th November 2023, About 3 months ago

"The rising cost and scarcity of rental homes have forced thousands of families to downsize........."

If this is the 'workaround' families are resorting to, then coming down the tracks fast are:
a) Overcrowded living conditions in the private sector
b) Lack of adequate space for growing families
c) Homes being overfilled with stuff as well as people
d) Condensation/ventilation issues
e) Mental health issues stockpiling for tenant
f) Return to historical squalid living conditions
g) No way out as all routes are unaffordable or unobtainable
What, exactly, can a disempowered landlord do about any of this?

Freda Blogs

12:52 PM, 30th November 2023, About 3 months ago

Reply to the comment left by LordOf TheManor at 30/11/2023 - 11:32Good points, but none of these issues seem to matter to Government - they would be yet more of the unintended consequences of their endless and punitive tinkering with the PRS - and whatever happens, it seems as though the LL will always be at fault.

Beaver

14:03 PM, 30th November 2023, About 3 months ago

Reply to the comment left by Freda Blogs at 30/11/2023 - 12:52
These things never seem to have mattered to governments across the UK.

I was watching some news coverage within the last couple of weeks that concerned a couple of single mums who were having a hard time in the housing market because they couldn't afford suitable accommodation. I think one of them said that she'd had to move 8 times in the last couple of years and had nowhere she could call home. And then the other lady being interviewed said that she thought that residential property should be taxed to pay for the problem.

And that's part of the problem. The electorate doesn't understand that landlords owning residential property are already taxed more than other businesses and other investments and it's dissuading smaller landlords from investing. So what you are left with is less choice and the larger, incorporated landlords who understand how and why they have to drive rents up to manage their risk. All the UK's governments have favoured short-term policies which basically amount to "we think the electorate wants to see us bashing landlords for the problem we caused so we are going to bash landlords."

But we are in a run up to the next election and in the run up to elections parties are under pressure to come up with big ideas. One of those big ideas could be to allow us to invest our SIPPS in residential property at cat A and create a boom in high quality, energy efficient housing both via new build and retrofitting existing housing stock.

I wonder which party isn't so entrenched in the historical dogma it's been spouting for decades to see that that's the only way to address both the housing crisis and the 20% of emissions coming from housing stock.

Old Mrs Landlord

8:47 AM, 1st December 2023, About 3 months ago

Reply to the comment left by LordOf TheManor at 30/11/2023 - 11:32In answer to your final question, the only thing a landlord can do about it is decline to let to a family you know will be strapped for space in your property, even though it might be tempting to take on tenants with more wage earners to mitigate the risk of their struggling to pay the rent. The cost of living crisis at the same time as a proliferation of regulations, restrictions and expense for landlords (with even more in the pipeline) makes it necessary to balance many more considerations and risks these days when reletting a property.

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