SpareRoom calls for balanced approach in landlord-tenant relations

SpareRoom calls for balanced approach in landlord-tenant relations

10:10 AM, 19th April 2024, About 4 weeks ago 10

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In a world where the conversation about landlords and tenants has become increasingly polarised, one platform is calling for more balance.

As the largest flat-sharing website in the UK, SpareRoom has witnessed firsthand the evolving landscape of rental housing over the past two decades.

The flat-share website is now urging the government to support landlords, emphasising the importance of keeping them in the market rather than squeezing them out, which ultimately hurts tenants.

Vast majority of tenants have this negative image of landlords

Matt Hutchinson, director of SpareRoom tells Property118 that the media plays an important role in shaping public perception of landlords.

He said: “We’ve reached a point now in the UK where conversation is so polarised. The vast majority of tenants have this negative image of landlords and there’s not much conversation going on in that middle ground.

“I think we tend to emphasise one or the other and we need both at the same time.

“The media plays a role in this in just creating this gulf as tenants need good landlords to exist because they need properties to rent.”

Mr Hutchinson adds: “We also need good landlords as there are so many positives to renting if it is done properly and landlords need good tenants.

“Landlords also need to welcome legislation and reforms which will benefit tenants as long as that means there is a stable market for landlords to operate.”

Landlords leaving the market due to challenging market conditions

Mr Hutchinson says the Renters (Reform) Bill has been introduced too late by the government, and he expresses concern about its rollout amidst dwindling interest in becoming a landlord.

He explains: “I think the interesting thing is the timing of the bill.

“When the government looked at changing the tax landscape for landlords a few years ago we’ve seen a steady decline in supply since then and a part of that is landlords selling up and also people going into short-term lets.”

He argues that while regulation was overdue, its delayed implementation coincides with landlords leaving the market due to challenging market conditions.

He explains: “The Renters (Reform) Bill is really important. However, it feels like seven or eight years ago we had a thriving rental market, but it needed regulating.

“It feels like the government has left it too long. They are introducing the regulation at a point where people are leaving the market anyway, and landlords are saying there’s too much to compete with now to make a living.

“The Bill does contain some really important protections for renters but we also need the protections for landlords as well.”

Flat-sharing has become a central part of the housing market

SpareRoom recently celebrated its 20th anniversary, and Mr Hutchinson said: “We launched in 2004 and it grew out of a previous website that started as a traditional sales and lettings site and the founder at the very last minute added on a noticeboard about flatshares.

“It turned out that was the bit that people really used and so that grew and grew and eventually it became a UK-wide thing.

“I’ve been here for 17 years now and it’s been an interesting time seeing the flat-share market come online and see it become more visible and more noticed by people.

“Flat-sharing has become such a central part of the housing market. It’s an interesting space to occupy because so much that goes on in the flat-sharing market radiates out to the wider housing market.”

Covid totally turned the market on its head

Mr Hutchinson explains that over the years flat-sharing has seen a huge surge – and there are a few reasons for this.

He said: “I think one of the main reasons we have seen a surge is it’s becoming more visible it’s now online and people are a lot more open about sharing houses.

“One of the other reasons is because it’s become an area for investment for property investors. People set out to attract flat-share customers buying HMOs and specifically catering to young professionals which I don’t think had happened before.”

Mr Hutchinson explains Covid also had an impact on the flat-sharing market.

He explains: “As with everything Covid totally turned the market on its head, twice really. Once we went through this whole period of loads of properties but nobody could move and then around September/October 2022 we had the complete reversal and everybody was moving again and there was nowhere to move to.

“We are in the third phase at the moment where everything is beginning to rebalance but we are still feeling the effects of Covid in the market.”

Rise in the number of people taking in lodgers

According to SpareRoom, there has been a massive jump in the number of homeowners who are renting out their spare rooms to lodgers with an 89% rise in such listings between January 2021 and January 2024

Mr Hutchinson explains the rise in people taking in lodgers.

He said: “I think in part it’s a financial reason. We saw a big spike after the last financial crisis more than a decade ago.

“Often if people have a spare room it’s a much easier source of income than getting a second job.

“There is also so much demand and people are always looking for rooms and taking in lodgers is a centuries-old thing.

“It was very common after World War Two but in the 1980s and 1990s it dipped off the radar a bit but now with mortgage payments going up after the mini-Budget, high interest rates and the cost-of-living crisis, it’s a straightforward way to make money for many people.”

Government squeezing buy-to-let landlords out of the market

Mr Hutchinson explains that the government need to do more to help landlords rather than squeezing them out of the market.

He said: “On one hand we need incentives for landlords to stay in the market, but on the other, we need the government to decide what it wants because they’ve been systematically squeezing buy to let landlords out of the market, which is fine if they have a plan to replace them with something.

“If the government have a big intent, that the market should have more institutional investment, then great but it just seems to me that they are squeezing landlords out of the market without a real plan for anything else which is why tenants are suffering.”

Mr Hutchinson says tenants presume that landlords are not struggling which is untrue.

He explains: “This is where conversations get complicated and nuanced as the end goal of all of this is that tenants are having an awful time but so are landlords.

“We do regular polls on SpareRoom asking people if they are happy with the way the housing market works and the government’s approach to it. The last time we did it, 96% of tenants were unhappy but so were 95% of landlords.

“Tenants just presume that because they are having a hard time, all landlords are just raking it in and having a great time which is not true.

“We need some more joined-up thinking and conversation and mostly what we need from the government is some policy that is thought ahead more than a year or two – something that will solve the housing crisis in a generation rather than what will get us votes in the next general election.”

Watch the video below to find out what SpareRoom thinks of the future of the private rented sector and which areas are experiencing the most significant rent increases.


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Comments

Monty Bodkin

11:38 AM, 19th April 2024, About 4 weeks ago

"The vast majority of tenants have this negative image of landlords"

No they don't;

"Despite coverage elsewhere, an overwhelming proportion of tenants are happy with their landlord. "

https://www.nrla.org.uk/research/deep-insight/tenant-survey-satisfaction#:~:text=Tenant%20Satisfaction,-Tenants%20were%20asked&text=Across%20England%20%26%20Wales%2056%25%20of,or%202%20across%20England%20%26%20Wales.

Old Mrs Landlord

12:39 PM, 19th April 2024, About 4 weeks ago

"seven or eight years ago we had a thriving rental market but it needed regulating". Seven or eight years ago there was a private rental market regulated by market forces. If properties were not up to scratch they did not let quickly and then only at a lower rent. As long as properties were not hazardous this suited some tenants. Tenants got what they paid for and had choice. Enforcement against the real rogues was the responsibility of the LA. Only when Government started to interfere with this market while at the same time introducing retro-active tax changes did the system become warped and landlords begin to sell up. It's not as if the powers that be weren't warned of the inevitable consequences, but in response they just doubled down.

TheBiggerPicture

13:41 PM, 19th April 2024, About 4 weeks ago

"they’ve been systematically squeezing buy to let landlords out of the market, which is fine if they have a plan to replace them with something."

No it's not, Government should not be attacking it's own citizens denying them property rights and playing favourites.

Cider Drinker

13:55 PM, 19th April 2024, About 4 weeks ago

One of the problems is too many people and too few properties.

This means even the least attractive properties with the least compliant landlords are able to be let.

Councils don’t want problem tenants in temporary accommodation. This is why they try to force landlords to hold on to anti-social, non-paying tenants.

We will never fix the problem until we close our borders.

Neither the Tories nor Labour want to close the borders.

TJP

14:44 PM, 19th April 2024, About 4 weeks ago

Reply to the comment left by Old Mrs Landlord at 19/04/2024 - 12:39
Couldn't agree more. Millions of would-be renters are and will suffer the excesses of Michael Gove and Jeremy Hunt.

PAUL BARTLETT

21:00 PM, 19th April 2024, About 4 weeks ago

Reply to the comment left by TJP at 19/04/2024 - 14:44
Don't forget gormless george osborne who victimised property business owners by taxing costs not profit.
No other business has such injustice.
Where does that cost go?
To renters of course!
Such a vote winner

PAUL BARTLETT

21:12 PM, 19th April 2024, About 4 weeks ago

Reply to the comment left by Cider Drinker at 19/04/2024 - 13:55
This government has failed to use the freedom of EU exit to implement a rational points based economic migration system.
So the organised crime people traffickers are exploiting gullible people that there is a welcome for random people.
The economic delusion that people are required for growth is last century nonsense that encourages political inaction. Production this century is about automation and artificial intelligence doing what people used to do.
An army of random people with no relevant skills makes no sense.
If pandemic taught us one thing it is that sovereign capability matters as global supply chain can't be relied on.

TheMaluka

7:35 AM, 20th April 2024, About 4 weeks ago

Reply to the comment left by PAUL BARTLETT at 19/04/2024 - 21:00
"gormless george osborne", surely an over generous assessment?

Lisa008

8:49 AM, 20th April 2024, About 4 weeks ago

I wonder if people who take in a lodger are seen in a nicer light, because they're viewed as doing a good thing? Sharing their home ?

Or does this sentence wind people up: “Often if people have a spare room it’s a much easier source of income than getting a second job."

Is every landlord workshy or ....???!!

The rhetoric around LLs just sponging off the desperate and being exploitative leeches is at an all time high...

Mark Whitelaw

10:46 AM, 20th April 2024, About 4 weeks ago

Reply to the comment left by PAUL BARTLETT at 19/04/2024 - 21:00
I don’t think Osbourne was gormless, I suspect more he was incentivised to create an uneven playing field, as the corporate landlords still get the tax breaks and individuals are forced out of the market. Big corporations don’t want competition. Brown envelopes or seats on the board?
Actually having looked him up, he is also gormless looking.

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