Tenants face dwindling supply of housing

by Property118.com News Team

10:35 AM, 14th August 2017
About A year ago

Tenants face dwindling supply of housing

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Tenants face dwindling supply of housing

Private sector tenants face a perfect storm with the supply of homes to rent set to fall as demand increases.

According to a survey of almost 3,000 landlords published today, 22 per cent plan to sell at least one of their properties over the next year, with just 18 per cent planning to buy additional properties to rent.

The new data, published in the Residential Landlord Association’s (RLA) latest quarterly research report, finds also that 33 per cent of landlords have seen an increase in demand for homes to rent over the past three years.

Property118 member Barry Fitzpatrick said; “This is just the tip of the iceberg which has been predicted by industry experts and Landlords alike. The Government has chosen to ignore the obvious (why?) and save face by not reversing the policy now before any real damage is done. This will cost them the next election as the real damage of soaring rents and massive increases in homelessness, and misery to millions of Tenants forced to move to cheaper accommodation (with all the costs and upheaval that that entails) will be felt just before the next General Election.”

Faced by an imbalance in the supply and demand for rental properties, 47 per cent of landlords indicated that they expected to increase rents over the next year. 35 per cent indicated that the changes to mortgage interest relief which will see landlords taxed on their turnover rather than their profit, unlike all other businesses, was the main reason why rents might increase.

Commenting on the findings, RLA Chairman, Alan Ward, said:

“As demand continues to increase for homes to rent, punitive tax changes are discouraging investment by the majority of good landlords who want to provide accommodation.

“Whilst efforts by the Government to support institutional investment in the sector are welcome, this will remain a drop in the ocean.

“To meet demand, we need pro-growth taxation that actively supports and encourages the majority of landlords who are individuals providing good housing, to invest in the new homes to rent we so desperately need.”

Read the RLA’s Senior Researcher, Tom Simcock’s blog post on the findings here.

Read the full report from the RLA’s Private renting Evidence, Analysis and Research Lab (PEARL) here.



Comments

Dr Rosalind Beck

13:25 PM, 14th August 2017
About A year ago

'According to a survey of almost 3,000 landlords published today, 22 per cent plan to sell at least one of their properties over the next year, with just 18 per cent planning to buy additional properties to rent.'

I think this part of the argument is weak as it suggests that there is only a 4% gap between those selling and those buying... Obviously, it is also simplistic as we don't know how many properties will be sold and how many will be bought, just the proportion of landlords doing this.

Rob Crawford

20:11 PM, 14th August 2017
About A year ago

Reply to the comment left by Dr Rosalind Beck at <a href="14/08/2017" rel="nofollow">https://www.property118.com/tenants-face-dwindling-supply-housing/#comment-93592">14/08/2017 - 13:25It is also, disappointingly, a very small representation of the total number of landlords (1.75 million) in England and Wales.

Gary Dully

23:18 PM, 14th August 2017
About A year ago

As usual, with any opinion poll I ever read about, nobody asked me!
I will be binning the last of my benefit tenants.
I won't be buying anything via a BTL mortgage and I intend to sell off my portfolio, leave the industry or raise my rents by 32%, whichever comes first.
That's 54 households looking for YOUR houses to rent!
Well done Terry, the fu**wit, Osborne.

Old Mrs Landlord

23:23 PM, 14th August 2017
About A year ago

Reply to the comment left by Gary Dully at 14/08/2017 - 23:18Terry Osborne? Who's he?

Gary Dully

20:24 PM, 15th August 2017
About A year ago

He is a "Terry Fuc*wit", is a northern phrase, which means he is one of academia, but has not the common sense to pull his pants down first, before he shoves out a brown torpedo between his rump cheeks!

That's Terry Fuc*wit, remember the phrase!

It's a bit like "Billie No Mates", which means he is of academia, but has not the common sense to wash and soap himself sufficiently to avoid his aquatencies from avoiding his 'whiffy' armpits, halitosis and bottom, that's a "Billie No Mates"!

Old Mrs Landlord

21:01 PM, 15th August 2017
About A year ago

Thank you for that invaluable contribution to my education, Gary. I do not move in circles where the first one is used and in my vocabulary "Billy no mates" is just a bloke with no friends.

Chris Unwin

7:52 AM, 19th August 2017
About A year ago

What am I missing here??

A landlord wants to get rid of his portfoilio due to adverse tax.

It seems to me he has to sell it. (He cannot just leave it empty and walk away with no repercussions). Somebody buys that portfolio. They cannot just leave it empty and hope for price growth as they will still get taxed on a benefit in kind. So they can either live in or rent it. In either case the house has not vanished it is still in the housing stock. Perhaps someone has bought a home to live in for a little bit cheaper than was possible in the past. Is that bad? It will mean a reduction by one in rental demand. If he rents it then there is no change to demand/supply. The rent might go up a bit but only if the market will stand it.
I struggle to understand how portfolios being sold on mass is really going to effect demand and supply. These properties will not simply vanish.
This was the very point made in the radio interview with , I think Eddie Lester (or maybe Nester) The person being interviewed had no convincing answer.

I feel this is perhaps the real reason why the government feels no need to repeal s24.
Assuming I am missing the point somehow, could someone perhaps enlighten me.

Thanks.

Chris Unwin

Monty Bodkin

9:36 AM, 19th August 2017
About A year ago

Reply to the comment left by Chris Unwin at 19/08/2017 - 07:52
"Assuming I am missing the point somehow, could someone perhaps enlighten me."

Certainly Chris.

Landlords stop buying. The properties don't just 'vanish', they never get built/converted/brought back into use in the first place.

Demand already outstrips supply.

Added to which, for a landlord to get best price they need vacant possession, light refurb, viewings, negotiations, chains, buyers backing out, conveyancing process etc. 6-12 months vacant.
For a distressed repossession sale even longer.
Multiply that by a few thousands.

"They cannot just leave it empty and hope for price growth as they will still get taxed on a benefit in kind."
Eh? Do you mean council tax?
People can certainly leave them empty. Many hitherto accidental landlords will do just that. No point going through the hassle and risk of being a punitively taxed landlord when working away for a couple of years. May as well keep it for occasional use, family or holiday lets.

Impose unfair taxes and the market reacts and changes accordingly.

Rachel Hodge

11:31 AM, 19th August 2017
About A year ago

Reply to the comment left by Chris Unwin at 19/08/2017 - 07:52
It doesn't solve or improve the housing crisis though. And it has the greatest negative affect on the poorer members of society - those who can't afford to buy.


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