Pennycook: Why a landlord exodus is DEFINITELY underway

It’s almost like something out of the novel 1984, when the evidence of your eyes is not to be trusted. I’m talking, of course, about housing minister Matthew Pennycook at the Renters’ Rights Bill committee hearing.

He went to great lengths to downplay the landlord exodus saying there was no evidence for it.

He does say that despite warnings for years that landlords are leaving, there’s apparently ‘no proof’ of a mass landlord exit.

Mr Pennycook admits that a trend of smaller landlords, particularly those reliant on buy to let mortgages, are selling properties. He attributes this to the tax changes introduced in 2015.

It’s a strange world when we have a growing population with regular reports that rents are rising because demand is higher than supply.

Ergo, we don’t have enough PRS landlords.

Mr Pennycook highlights that the overall size of the PRS has doubled since the early 2000s.

That’s a selective benchmark because it avoids the issue of landlords selling since 2016.

We all know of landlords who have sold up or are thinking of doing so. All of us.

If they aren’t selling, they are moving into holiday lets (out of the frying pan??).

Exit the private rented sector

The decision of landlords to exit the private rented sector (PRS) is influenced by a complex interplay of factors.

Along with the section 24 changes, we’ve had higher interest rates which has hit highly geared landlords.

Then there are the regulatory changes that will include the nonsense EPC standards which are costly to implement.

Plus, we have the Renters’ Rights Bill which will tip the playing field very much in favour of tenants.

It was nice to see Ben Beadle of the NRLA at the committee declaring – straight out of the gate – that landlords are in favour of abolishing section 21.

We really aren’t Ben.

Discuss a landlord exodus

However, if we are going to discuss a landlord exodus, we also have to confront some truths – a lot of us are planning to retire.

Most landlords invested years ago and are now looking to cash in and put their feet up. Who can blame them?

That was the purpose of the investment.

But there are fewer investors following us into the PRS. I can understand why.

The new Bill will make life more difficult, and can you be bothered with it anymore?

Why struggle trying to get your property back when the courts don’t care about landlords?

Landlords selling up

I read every week on Property118 about landlords selling up, so here’s a quick rundown for Mr Pennycook to stop saying daft things in public:

• 19 July: TwentyEA says a mass sell-off of landlord properties is now underway
• 18 Aug: NRLA says that landlords are more likely to sell than buy
• 5 Sept: Rightmove says a record number of former rented homes are up for sale – it’s one in five
• 13 Sept: David Coughlin says on Property118 that tough new rules have sparked a sell-off
• 25 Sept: ONS and Hamptons reveal a trend of landlords selling – it began in 2017 when the tax changes started hitting home
• Oct 2: The Guild of Property Professionals argues that growing concern about the RRB will spark an exodus
• Oct 4: This is me flagging up the Goodlord and Vouch report about landlords increasingly leaving
• Oct 24: Investor confidence has been knocked, says Propertymark, as tenant demand grows but fewer homes are available.

And let’s finish with this classic from the same committee meeting when the bloke from Shelter said that the abolition of section 21 won’t lead to an increase in homelessness – and tenants need tighter eviction rules.

Now THIS is the kind of nonsense that will frustrate landlords and help them towards the exit.

Landlord exodus not being taken seriously

I added my previous column because I suspected at the time that the landlord exodus was not being taken seriously enough.

That was just three weeks ago, and the housing minister’s statement proves this issue is being ignored.

If so many good/reputable organisations are stating clearly that a sell-off is underway, who are we to disbelieve them?

Why would a housing minister decide that he knows better than they do?

And why does everyone STILL misunderstand the role of Section 21 in possession proceedings?

Renters’ Rights Bill is nonsense on stilts

But the fact is that the Renters’ Rights Bill is nonsense on stilts – landlords are being held to account for the antics of tenants and a court system that can’t cope.

We won’t be allowed to refuse most tenants, but we will have to impose stricter criteria on the tenants we do want.

Mainly, those that can pay!

The bottom line is that we don’t need any landlord to leave – the level of demand keeps growing and we need a PRS that functions.

No one seems to understand this basic fact.

These are dangerous times for all landlords, both large and small.

I knew that Labour in government was going to be bad, but I didn’t appreciate how bad they would be and so early in their reign.

And we still have the potential disaster of the Budget next week from Rachel ‘Thieves’.

If Pennycook doesn’t believe the figures now, let’s see his reaction after the death knell is sounded by his Chancellor and a huge wave of selloffs begins.

Housing crisis? You ain’t seen nothing yet.

Until next time,

The Landlord Crusader