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0:03 AM, 10th August 2023, About 9 months ago 36
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The lack of housing supply is creating huge problems in the private rented sector, an industry body has warned.
The Association of Independent Inventory Clerks (ACII) blames the Renters Reform Bill and energy efficiency proposals for creating “the perfect storm in the rental market.”
With more and more landlords leaving the private rented sector, many renters will be left in limbo trying to find a place to rent.
Daniel Evans, chair of the Association of Independent Inventory Clerks, says: “Nobody knows how many landlords have left or are about to leave.
“One large firm of accountants, analysing HMRC data reckoned 70,000 landlords exited the private rented sector (PRS) in 2022 and it looks as though the situation is getting worse.
“Every single company that supplies the sector is going to struggle because too many landlords are leaving or have already left, and nobody knows where the new landlords are going to come from.”
Mr Evans believes that one of the biggest barriers to landlord recruitment is the changes in tax regulation.
Since April 2020, all buy-to-let landlords have had to pay tax on all their rental income although they do receive a tax credit worth 20% of their mortgage interest payments.
He says that the government should rethink their tax policy on landlords.
“The first thing the government should do is U-turn on that tax policy. Landlords should be able to offset all their mortgage costs against tax.
“The new rules mean that landlords who pay higher rate tax have had to pay substantially more and some who were in the lower band have been pushed into paying the higher rate.
“Profits have been squeezed for many landlords and high tax rates aren’t going to attract new ones.”
Mr Evans says the other problem is that the energy efficiency requirements have not yet been published.
Though the plans have not been made into law, ministers have previously proposed that by April 2025, newly rented properties in England and Wales will need to meet a minimum EPC standard of C – tougher than the current E standard.
The regulation is also slated to apply to existing tenancies from 2028.
He says many landlords will have already left the PRS due to the proposed changes.
Mr Evans says: “The problem here is that a lot of landlords who were worried by this rule change may have already sold up and left or are in the process of doing so,”
“Any slight relaxation of the rules now isn’t going to tempt new landlords in. We have to face facts a lot of our housing stock is old and needs improvement to save energy.
He says the government should be offering financial incentives to landlords to help improve older housing stock which may need energy-efficiency improvements.
“There should be some financial support to achieve these targets. If that was in place, the sector might look more attractive.
Mr Evans says the government needs to build more energy efficient homes to entice new landlords into the sector.
“The bottom line is that we’re not building enough houses. If more rentable homes were built and they already had the energy efficiency standard, then more landlords might consider buying them if they could see a decent return on their investment.
He added: “Landlords have been made to feel like they’re public enemy number one and, for the vast majority of them, that’s totally unfair.
“The PRS is a vital part of the country’s overall housing strategy, if we’re not careful, it’s going to be damaged beyond repair.”
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Christopher Lee
20:15 PM, 10th August 2023, About 9 months ago
Reply to the comment left by Tom McGrath at 10/08/2023 - 20:08
Your attachment didn't work.
But irrespective...no doubt there would be a shock...
But as I already said, our overall GDP performance is identical to Germany since the ref.
We're not that far behind France.
Exports to the EU are at record level.
You trying to link the PRS to Brexit is still totally ridiculous.
cashcow
20:46 PM, 10th August 2023, About 9 months ago
I am selling again 2 this year and pushing more good tenants out to get whats left in the London rental supply. Selling right now is hard as you only have to look on Rightmove to see all the ex BTL type flats that are flooding an already very rocky market.
We and the tenants have been forced into this situation by this government that's only interested in helping big business take over.
Its not only sad but criminal what has happened to the PRS.
Ps 1) Could the government not divide the CGT 50% with the tenants so they could have a deposit to purchase.
2) Allow landlords to offset the EPC costs against the Current years Tax and not as a capital tax, as thick walls and dodgy looking double glazing in a lovely Victorian house will not increase the value of these properties.
Bristol Landlord
21:31 PM, 10th August 2023, About 9 months ago
Reply to the comment left by cashcow at 10/08/2023 - 20:46Landlords should not expect any assistance as Government policy is not to help but to hinder independent landlords. This because their unannounced agenda is for themselves to personally benefit from a corporate takeover of the sector.
It is blatant corruption at the highest levels of Government.
Tom McGrath
23:34 PM, 10th August 2023, About 9 months ago
I fear we are witnessing the death of the Private Rental Sector. The creation of the Assured Shorthold Tenancy started the heyday, and the Renter's Reform Bill will end it.
Many retirees, like myself, started new careers and are now actually retiring. There are few new landlords to take our places. Greedy government tax raids, rocketing interest rates, soaring repair costs and the demonisation of landlords have all done their bit to deter new landlords. Don't it always seem to go that you don't know what you've got till it's gone?
Roy Jones
0:54 AM, 11th August 2023, About 9 months ago
I’ve rented for 10 years using our local council for tenants after 3 tenants later all left complete trashing the place each time but this last time was final straw had enough and with the new proposal requirements And have now sold property never ever will be a landlord it’s not worth it .
Interest on what I will make after I’ve sold money in bank with current high rates I will get more than the rent I use to get .....
rebecca anelay
9:50 AM, 11th August 2023, About 9 months ago
Reply to the comment left by Tom McGrath at 10/08/2023 - 19:02
I can't turn the lights out because my recently departed tenants took all the bulbs in an attempt to disguise the fact he'd tampered with the ring main. But Thank God I've sold it!!!!
Tom McGrath
11:00 AM, 11th August 2023, About 9 months ago
Reply to the comment left by rebecca anelay at 11/08/2023 - 09:50
Nice one, Rebecca!
Tony Johnson
14:08 PM, 11th August 2023, About 9 months ago
Another article that still focuses in BTL and EPC but keeps ignoring the biggest breach of Landlords property rights: The abolishion of Sex 21.
Financial reasons sre only part of the story .
The loss of Sec21 is going to be the biggest cause of landlord exits
Tony Johnson
14:13 PM, 11th August 2023, About 9 months ago
Reply to the comment left by Roy Jones at 11/08/2023 - 00:54
Those sort of tenants will be hammered by the corporate landlords coming in
1. They will be black listed and find themselves never accepted by any of the big giants coming in
2. They will be ruined financially because these corporates will squeeze them for damages until they squeal.
Bad Tenants have got a big shock coming and Shelter can't save them.
GlanACC
15:43 PM, 11th August 2023, About 9 months ago
Reply to the comment left by Tony Johnson at 11/08/2023 - 14:131. Possibly, but only because they have a CCJ or fail to meet qualifying criteria (salary etc)
2. No they wont, if you have no money you are fireproof, you can't get blood out of a tenant as many landlords will testify.
Shelter and GRent and other such annoyances has a far bigger budget and legal team than most landlords, so they will be able to bully landlords. The only solution (as I have taken) is to sell.