Property leaders urge Michael Gove to address PRS pressures

Property leaders urge Michael Gove to address PRS pressures

0:02 AM, 16th December 2022, About 2 years ago 9

Text Size

Leading members of the property sector have written to Michael Gove calling on him to address the unsustainable pressures on the private rental sector.

They say that Government policy needs addressing to help deliver cheaper rents for tenants – because that is what most tenants want.

The letter highlights that more tenants want a cheaper rent than are concerned about the rented property’s condition, but government policy doesn’t address this point.

Instead, planned policies will push up rents for landlords – and, ultimately, rents for tenants.

The letter also makes clear that any rent freeze for tenants in England would not work – and would lead to landlords leaving the sector.

The letter’s signatories include William Reeve, Goodlord; Peter Knight, Property Academy; Gary Wright, flatfair; Theresa Wallace, Savills; Heidi Shackell, The Lettings Hub; and Ben Beadle, NRLA.

The letter to Mr Gove, the Secretary of State for Levelling Up, Housing and Communities, is below:

Open letter: Unsustainable pressures on the Private Rented Sector

To: The Minister of State for Housing and Planning (Department for Levelling Up, Housing and Communities)

We, the undersigned, are business leaders within the Private Rented Sector across the UK. With inflation hitting levels not seen since October 1981, we believe that current government policy in the rental sector — covering 35% of UK homes — is stoking housing inflation, the largest single component of the cost of living.

As set out in the recent Renters’ Reform Bill White Paper, current policy objectives include improving the quality of housing and giving tenants greater peace of mind about being evicted. These are worthy objectives which we, and most tenants, support. But tenants – whether professionals or students – also want their housing to be affordable, and current policy appears to ignore this point.

A recent survey of tenants confirms that rising levels of rent are tenants’ biggest single concern, cited by 86% of respondents. By contrast, the condition of rented properties, a priority of the Renters’ Reform Bill, while also a significant concern, is cited by fewer than half as many tenants: 42%.

Government policies to restrict landlords’ legal rights, raise minimum energy efficiency standards to an EPC band C, extend mandatory local licensing, raise taxes on property income and transactions, enhance compliance obligations for HMOs, and increase maintenance costs are putting undue pressure on landlords — most of whom have only one or two rental properties. Already, we see net negative repercussions on rental supply, with many landlords leaving the sector; property portal data shows that supply is down 46% compared with the five-year average.

At the same time, tenant demand is at an all-time high, with portal traffic up 142%. Many surviving landlords are understandably looking to cover their increased costs via higher rents. Goodlord’s Rental Index saw rents on new tenancies in September hit £1,249 pcm, up 13% on the same period in 2021. Rent increases restrict mobility and supply, with tenants frightened to move house for fear of facing even higher rents in a new home.

By failing to encourage adequate supply, government policy is directly contributing to the sharp increases in rental prices.

Freezing rents in response, as recently introduced in Scotland and proposed by London’s Mayor, would further damage the sector, restricting supply to a greater extent and fuelling landlords’ withdrawal from the sector. We urge the government instead to consider ways to improve supply – while continuing its aspirations to ensure quality homes for tenants – by ensuring the rental sector remains an attractive place to invest without relying on skyrocketing — and ultimately inflationary — rents.


Share This Article


Comments

Reluctant Landlord

9:14 AM, 16th December 2022, About 2 years ago

but this isn't a vote winner - the government want to stir up the rental masses and get the vote from the 'downtrodden' victim tenant. Landlords are all evil remember - even social ones who are killing tenants by not addressing mould.....

All Gove will do with this letter is wipe his a£$e with it.

Seething Landlord

13:58 PM, 16th December 2022, About 2 years ago

What a nonsensical letter, playing right into the hands of government.

You can see the headlines now: "nearly half of all tenants are concerned about the condition of their homes"; "82% of tenants demand rent controls".

They describe themselves as business leaders but fail to identify who is actually following them within the PRS. I have never heard of any of them apart from Ben Beadle and he certainly did not ask me for my opinion before signing the letter.

Whoever was the mastermind behind the letter would do well to take a few lessons in the art of spin doctoring before providing even more ammunition for the guns ranged against us.

I am reminded of the age-old advice given to those attending meetings - " if you can't say anything useful, keep your mouth shut".

cashcow

20:17 PM, 16th December 2022, About 2 years ago

It Might well be the government want private LL's to sell up so they can get there grubby hands on the large/quick CGT payments coming there way.
We are getting shot at from every angle if the above is true we just shot ourselves in the foot.

cashcow

20:32 PM, 16th December 2022, About 2 years ago

The latest statistics from HMRC published today (August 2022) show that the Treasury has benefitted from record amounts of Capital Gains Tax (CGT) in the tax year to 5 April 2021. Total CGT liabilities amount to £14.3bn, up 42% on the prior tax year. With the quantum of capital gains reported increasing by 19% and the quantum of CGT payers increasing by 20% on the prior tax year. This record-breaking quantum of CGT receipts comes hot on the heels of bumper receipts in the previous tax year (5 April 2020).
They got our money no matter what we do, they will get even more if you sell up, its a tax trap.

Mick Roberts

12:34 PM, 17th December 2022, About 2 years ago

Most tenants do want cheaper rents.

Most tenants can't afford New build standards. Give them choice, they'd rather a good house for £700pm instead of New build for £1000pm.

Seething Landlord

13:19 PM, 17th December 2022, About 2 years ago

Reply to the comment left by Mick Roberts at 17/12/2022 - 12:34
Very true but government believes that they should all be levelled up and instead of pointing out the idiocy of the concept our so-called leaders are pandering to this utopian view of the world.

Mick Roberts

16:08 PM, 17th December 2022, About 2 years ago

I know at our expense.
That Sadiq Khan is his name is it. He thinks all Landlords with no mortgages should do cheap rents. Aah right, let's all scrimp & save & go without to then let people live in our houses at what rent the Govt chooses. That's called Council & charity which we are not. Don't know about u, but I ain't gone without for years to then go without again. Although I'm a hypocrite cause I am doing ha ha with my cheap rents, but I want as much as I can get from people I don't know, as we don't know what is coming next.

Monty Bodkin

10:17 AM, 18th December 2022, About 2 years ago

Who are these "property leaders" leading? They certainly don't lead or represent me.

*"As set out in the recent Renters’ Reform Bill White Paper, current policy objectives include improving the quality of housing and giving tenants greater peace of mind about being evicted. These are worthy objectives which we support."*

Scrapping section 21 does not have the support of landlords or of anyone who cares about the obvious consequences.
It is a bloody stupid proposal that will make renting far worse for the vast majority of tenants.

Helen

17:59 PM, 18th December 2022, About 2 years ago

I just saw an article on another landlord site (not sure which one) which said there is a consultation on the banning of S21 which ends at the end of January. There was a link to it which I would like to access, but can't find it again. Does anybody have access to this?
The comments said that ALL tenants will need to go through the court process after the changes in order to prove we have grounds to evict. Is this the case? If so the courts will be even more gridlocked. I have mortgages which expire their fixed term from June onwards and I am not even sure if they can be re-mortgaged without doubling the rents, which I can't and won't do, so I will have to sell. I don't want to wait over a year with variable rate interest while it goes through the courts. My tenants are decent and may leave when I ask them but on the other hand, they may stay as long as they can if they get wind of the new policy. Should I just issue S21 on January 2nd, while I still can?

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