Renters face struggle to find homes as supply dries up

Reply to the comment left by Mick Roberts at 24/02/2022 - 09:55
Rules are really hard to follow.
I'm from Wales and I have a landlord licence to manage my own property, theny daughter wanted toove abroad for a couple years and I had to pass more exams and pay another licence fee to become an agent to manage her property.

Many people don't realise that if the house is in the spouses name and the other spouse wishes to manage ( which they are encouraged to do for tax efficient purposes) the spouse managing would need an agent's licence not a landlord one

Reply to the comment left by Chris Bradley at 24/02/2022 - 09:59
Yes it's pathetic in't it, a paperwork torture which does nothing to make the house better. In fact, makes it worse as u not spending time locating boilers or parts etc. I'm current having 54 boilers fitted next few weeks & if this was Licensing time, something would have to give.

Yes our Licensing Agent questions are very confusing.

Reply to the comment left by Chris Bradley at 24/02/2022 - 09:44
Our experience has been similar. Last couple we advertised Openrent suggested we close to new enquirers a few hours after the ad. went live because we could not keep pace with the enquiries. A brief initial phone call weeded viewers down to a manageable number and we spent a day showing a variety of applicants round the place, learning more from friendly conversations with them as they viewed, before giving those still interested a full enquiry questionnaire. Lots of complaints from those not even able to view and several enquiry forms not returned. I do feel sorry for aspiring renters with less than perfect credit and job status but they have the various tenants' champions, the media and the politicians to blame. Unfortunately, all parties will scapegoat "greedy landlord parasites". No wonder so many landlords are selling up,

Reply to the comment left by Old Mrs Landlord at 24/02/2022 - 11:10
Great words Old Mrs:

. Lots of complaints from those not even able to view and several enquiry forms not returned. I do feel sorry for aspiring renters with less than perfect credit and job status but they have the various tenants' champions, the media and the politicians to blame. Unfortunately, all parties will scapegoat "greedy landlord parasites". No wonder so many landlords are selling up,

It is true that recent changes in tax laws and benefits payments have made renting to long term tenants less profitable
- removal of letting relief and w&t allowance,
- 3% SDLT surcharge (even when putting mortgaged property in joint names with the wife),
- 8% premium on CGT, no IHT relief no CGT relief on sale and reinvestment and
- the dreaded S24, which forces landlords to use complicated arrangements in order to offset its impact on their income tax bill.

While some excessive regulations have been introduced by certain local authorities to substantiate licencing schemes, it is difficult for landlords to argue against many of the regulations, which simply codify best practice:
- fire precautions (furnishings, smoke, fire doors)
- electrical safety (EICR + PAT)
- gas safety (gas certs + CO alarms)
- legionella
- energy efficiency
- homes fit for habitation (partially aimed at tenants being able to hold social housing providers to account)
- tenant fees
- tenant deposits

The days of the gifted (or otherwise) amateur landlord are behind us.

Yes, this clueless government continues to stumble from one self-made crisis to the next, prevaricating and dithering, while ignoring the warnings of those in the know, before implementing rushed, ill-considered short term fixes, focussed on political expediency rather than good long term governance.

Supply has been constrained by the failure to build capacity in the social rental sector, loss of multi tenant rental properties to homeowners, landlords electing to rent properties as furnished holiday lets (avoiding S24 and some regulation) and the government's tinkering with SDLT to promote the purchase of second (and third) homes.

Demand has been stoked by housing prices forcing renters to rent longer as they attempt to save for their first step on the property ladder, graduates struggling to build savings as they pay back their loans with an interest rate better suited to bridging loans (3% above RPI), the disabled robbed of PIP and the homeless, who local authorities are unable to house, to name but a few.

With the government encouraging specialist build to rent developments, which result in cherry-picking tenants from their target groups (affluent, student, elderly, homeless, etc) creating socially isolated housing, ill-suited to both general tenant demand and social integration, it is little wonder that traditional landlords in the PRS are re-evaluating their businesses.

We can see how much importance governments of both main parties really give to housing in this country by simply looking at the constant procession of ministers who have been appointed to the (variously named) housing department, only to be replaced before any plans might actually be thought through and implemented (20 in as many years).

While we wait for them to publish their White Paper on "levelling up" housing, the requirements under MEES for EPCs and how all their environmental ambitions will be funded as the cost of borrowing rises, it is little wonder that landlords facing these unknown investment costs would take advantage of inflated property prices to sell properties of limited current or expected economic value.

Like the proposed removal of S21, the government's actions have resulted in unintended consequences. Landlords will continue to sell down their portfolios while requiring squeaky clean references from those tenants they still have capacity to house. With limited provision, more vulnerable tenants will be forced to rent from the unscrupulous, who, in the absence of co-ordinated action by local authorities, will continue to profit from those least able to fend for themselves.

Landlord associations, such as iHowz, have long argued for better landlord education in order to support a voluntary code of practice and avoid costly administration associated with government run registration. iHowz and other landlord associations have taken part in government consultations, such as MEES and continue to encourage councils to carry out their obligations without resorting to overpriced licensing schemes.

While forums such as this are a useful way for landlords to communicate, they cannot ignore the fact that many of them will not invest sufficiently in themselves (training) or their properties (planned as well as reactive maintenance). I know that many who post here are from the enlightened group who understand that it is only by collective representation (membership of a landlord association) and treating this as a professional business will we have a chance of being able to offer quality homes to a broad selection of tenants at a fair rent.

Too long, and too many times I have witnessed landlords who wonder why they end up in trouble after running their properties on a shoe string, simply treating tenants as cashflow with no attempt to keep updated on their legal obligations. This is what the tenant groups, councils and government see and why we are likely to end up with landlord registration (not a bad thing if unregistered landlords or agents can no longer rent substandard properties) and all properties will also have to be registered or licenced.

The build to rent sector are being encouraged as they are bringing professionally run well financed new capacity to the PRS. Those who chose to stay in this sector will have to show the same, while leveraging our USP of offering the human touch in dealing with our tenants.

If you would like to join iHowz, or simply find out more about what they can offer, take a look here
https://ihowz.uk/join/
or see them at FutureBuild 1 -3 March or the London National Landlord Investment show in 15 March

Reply to the comment left by at 24/02/2022 - 13:56
I find your list of best practice regulations rather controversial. For instance, while fire doors may be desirable in HMOs, why would they be necessary in ordinary family homes? Do you personally have the ugly, irritating things in your personal home? I have read that there has never been a case of legionella in domestic premises other than a large air-conditioned block in USA. Tenant fees were charged to pay for the time agents spent on referencing tenants and are now charged to landlords who simply pass on the cost in rent rises so how is that a necessary improvement? The deposit protection regulations are good for tenants but the idea of making one deposit cover two premises when tenants move from one to another is just bonkers, even if there is no change in the amount of the deposit. Why do you think tenanted properties should have higher rated EPCs than other tenures? As you exist to represent landlords it is surprising that you are such a fan of build-to-rent. Many of us individual, sef-managing landlords devote a great deal of time to ensuring we keep up to date and compliant with all regulations (knowing that the buck stops with us) yet we frequently see agents advertising rentals without showing EPC ratings, asking for deposits greater than the law allows and other such misdemeanors.

Reply to the comment left by Old Mrs Landlord at 24/02/2022 - 15:37
Old Mrs,

Yes, we do have to do them things now.
Nottingham Selective Licensing now, the accreditation scheme, when she inspects, it's every internal door to solid wood. Will be full fire door in 5 years time. Normal residential houses. That alone will cost me £80,000. They want New Build standards which Housing Benefit rent don't pay for.
I had to do Legionella course 2 years ago as my Letting Agent won't let us rent out if no certificate which plumber wants extra £25 for while there servicing boiler, costing me extra £1000's every year.

Here's what I've started to give my tenants after we've spoke which mentions some of the things u do.

I've not finished this, only rough draft.

Most of u r very good. But are u perfect? Read Licensing conditions and tell yourself first could u comply with all them, second, would u take any tenant on that wasn't the most prim proper person ever?
Third, if u was a landlord getting older, would u want to be dealing with that for EVERY house EVERY tenant? And giving out 200 pages to each tenant each house.
Selective Licensing conditions Feb 2022
https://docs.google.com/document/d/1sD_HRl57ANNw4PBAb-FGRU7h-0Qby9Vm5xLioH_nA7c/edit

Please ring me about this text and read to the end before u panic.

We'd like to sell your house within 10 years for the reasons below. We can sell it u and pay your deposit for u, if u r able to buy it. Sell it to someone u know who would keep u in. We have people who may buy & keep u in.

Lot of Landlords give tenants 2 months notice. We recognise this is your home, and would never contemplate selling on u if you've done nothing wrong, however the Council's and Govt are making it really difficult for the good Landlords-All to get back at the bad Landlords.

We are only in this position cause the Council's and Govt are bringing that many rules in retrospectively, they making it extremely hard for good landlord that's abiding by the rules and is getting older, to carry on.
We doing 4 times the amount of admin, paying out thousands in unnecessary costs-Nothing which makes your home better.

U should all really be writing and meeting your MP and Councillors and Govt and Council and telling em what they are doing to people who didn't have a problem before.

The latest rule they are now proposing to bring in in 2025 is EPC to a C. I've already got the Combi boiler, UPVC etc., so it's external wall insulation. Approximately £10,000 each house, but they not bringing it in for Council houses or Owner houses-Only to Private Landlords.

I never thought we'd be in the trap we in now where Councils and Govt have made it that bad for Landlords, that it's made it extremely hard for Benefit tenants to move house.
Years ago, u had a choice to move, and then I'd have sold your house as u moved on. We all in a trap where u can't move now if u want to. Govt and Councils has done this to u. Landlords packing up in their droves due to Licensing and Universal Credit.
It's also the bad tenants some of these rules are being bought in for, which makes it unfair for u good ones.

I used to be able to give u keys, service your boiler and u tell me when something needs doing. I'm now doing courses at 4am just to keep u in your home. And many of u aware, I don't want the houses any more, only keeping them to keep u in your home.

U can buy it now if u or your buyer can arrange it. Also happy to wait for u up to 10 years. I'll pay your 5% deposit if u can buy it.

Please work with me and let's find a Landlord that is younger and not weary of the all the latest rules, who's happy to keep u in for 10+ years. I'd get a lot more selling it empty, but I'm mindful that it's been your home for years, so am prepared to lose £10,000 to sell to discount Landlord to keep u in your home.
And selfishly, I can't carry on forever in a job that the Govt & Councils are making it harder & harder & more hours on unnecessary burdens.

I may have a few people now who wish to buy and keep u in if u wish to go ahead now.

Some of u have been with me 24 years and I don't take this decision lightly.
Some of you's kids are also getting older and your Housing Benefit towards the rent will drop massively when your kids are 18 or leave. I used to have affordable flats for u to move into. Now the people aren't moving from my flats any more.

Govt & Councils are making far too many retrospective changes when the tenant has already lived there years & the Landlord bought the house years ago. If people have not had a problem for years, Govt & Councils should be rewarding them and lower costs, not penalising them and higher costs.

U can start to stop this spiralling lack of supply of houses to yourself by emailing the below and putting your name address phone number at top of email.

selectivelicensing@communities.gov.uk

Councillor who responsible for Licensing fee increase
linda.woodings@nottinghamcity.gov.uk

Nottm Council Labour boss who supports Licensing
david.mellen@nottinghamcity.gov.uk

Nottingham North MP
alex.norris.mp@parliament.uk

Below is other reasons which are forcing my hand:

We now have to do Fitness tests on new rentals £150 each house.
Electrical Installation Condition reports organisation & implementation £300+ each house.
Selective Licensing £890 just for one house.
Legionnaires checks £70 each house.
EPC’s £80 each house.
EPC’s soon to a C each house approx £10,000
Data protection checks £40.
Carbon Monoxide detectors & smoke detectors, when wired, £300 each house.
Getting registered with Information Commission officer £40.
Floorplans, Inventories £90 each house.
Landlord has to criminal check himself & has to prove he has Right to live in UK
Increased staffing admin behind the scenes.
As you’ve seen, checks/inspections on your houses now with smoke alarms-Should be much more detailed checks.
Consultant & Legal fees to keep pace with legislation & staff training.
Letting Agent costs for new tenancies & house swaps £70pm each house.
All the above is extra costs we din’t have when many of u moved in.

Below are other reasons why Landlords are packing up & why u can’t get anywhere any more, & remaining Landlords charging what rent they like:

1. Wear n tear allowance scrapped.
2. Stamp duty for BTLs.
3. 100% council tax payable on void properties from day 1 (not even a 25% discount).
4. Reduction in deposit amounts ( 5 weeks is woefully inadequate).
5. Unable to take pet deposits.
6. Council tax single banding for HMOs.
7. Section 24 tax, no other business is unable to offset their costs.
8. Numerous unfair decisions against landlords made by the deposit schemes, whilst landlords are unable to have a rogue tenant database, only a rogue landlord list.
9. Scrapping of fees for application and referencing which has led to higher costs from agents.
10. The lack of help with COVID and the court system being unfit for purpose, with a further insult of section 21 being scrapped!

Old Mrs LL and Mick

You hold your rental properties as the primary asset in your business, so expecting some investment to ensure you provide your tenants a safe home and updating to meet revised safety standards should not be regarded as a nice to have and reading our posts you are clearly conscientious landlords who provide homes to your tenants which meet these standards.

I take the point on fire doors, but they are not all ugly flat white slabs. Aesthetics always cost a little more, but £30 more will get you a veneer or a 2/4/6 panel fire door, ensuring your property has that quality look. And given that it will be resistant to tenant abuse, reduces noise transfer, the fitting cost is about the same and the expected life probably exceeds that of double glazing.
https://www.selcobw.com/internal-4-panel-grained-fire-door-fd30-1981-x-762mm-6-6-x-2-6

Agents were forecast to go bust once fees ended. While a few left the market, it has generally resulted in no fees for tenants and no increase on admin fees, while agency fees have fallen in some instances. My point was that many landlords have failed to educate themselves and are either unaware of the Tenant Fees Act or are playing chicken and charging fees on the basis that they do not understand that this will prevent a successful S21 eviction.

You question the deposit protection requirements and again it is clear that you are up to speed on the requirements. It is annoying that there is no provision for a reduced fee when transferring the deposit for a tenant who moves to another property. Yes, there were issues with interpretation when this was introduced but most of these concerns have now been addressed. What remains an issue is the lack of sanctions to ensure the timely return of deposits, even from landlords who have registered deposits. Many landlords would agree with you on pets, but an increase in the rent should reflect the risk and can be adjusted at the next rent review.

I am not a big fan of build to rent. The point I was trying to make is that with no clear certification to show that individual landlords run their business in a professional manner, keeping their properties compliant and their knowledge up to date the banks, planners and other have preferred the option of large organisations which can demonstrate these and are able to deliver a more consistent product at larger scale. In doing so, politicians can easily point to homes being delivered. Does this lead to developments where the tenants are all from one subset which is not healthy as they are likely to lose empathy for others in society (much like the siloing which social media has encouraged).

Rental property in the UK is generally older than the average housing stock and, as such, is more likely to be less energy efficient, due to a significant proportion being build before the early 20th century, with cavity insulation introduced from the 1970's. Unlike homeowners, tenants are unlikely to invest in the structure of the building and even if they wanted to do so, they cannot borrow against the building for these long term improvements. I realise that the tenant receives the direct benefit but to a degree, that is the point. We are running a business and a happy customer is a loyal customer. We raised the common complaints during the consultation, that a fixed spending cap does not reflect the value of a property or the rent period required to recover the cost. We also asked that if the emphasis is to focus on carbon emissions, electric heating should not be penalised. (The gas price crisis may influence this.)

I accept the criticism on legionella, but like PAT testing, subject to officious box ticking bureaucrats, like risk assessments they can be completed by a competent landlord or their team.

Reply to the comment left by at 24/02/2022 - 18:53
Rod,

Problem we have is, they now expecting New build standards retrospectively on 100 year old house where tenant has lived there 20 years & only paying 75% of rent we should be getting. We all know new builds cost more.
Thanks for link on doors, very nice, but maybe £1500 per house. On a house u don't want & only keeping it for tenant anyway. On a house where u trying to charge tenant cheapest rent possible as they can't afford any more.

These retrospective changes are nowhere near as bad on me Letting Agent houses where if have to charge more rent for this, so be it. It's the Benefit long term tenants that are being overlooked by Councils & Govt.

Reply to the comment left by at 24/02/2022 - 18:53
Mr. Townson, you have now conceded a number of my points which your original post said were "difficult for landlords to argue against" and "simply codify best practice". However, you have failed to address my queries as to why you hold the opinion that legislation must require that renters live in homes subject to better than, or at least different from, standards than those which apply to other tenures, specifically such things as EPC ratings, fire doors and anti-legionella measures. Furthermore, you seem to have misunderstood my point regarding lifetime deposits. It is not the fact that agents may charge tenants for transferring a deposit from one property to another that I described as bonkers, but that during the time the tenant gives notice to leave one property and is required to put down a deposit on his next rental the same moneys are required to cover both. Until the tenant actually leaves it is not possible to accurately assess any damage as removing furniture almost inevitably causes scrapes and damage to flooring, corners and doorframes. (Our properties are in an area where furnished rentals are almost non-existent. Thankfully, it is not an area subject to selective licensing.)