Why the UK’s housing crisis will deepen as landlords flee

Why the UK’s housing crisis will deepen as landlords flee

9:18 AM, 29th November 2024, About 4 days ago 12

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They say there is a housing crisis – and with good reason. Net migration to the UK reached an astonishing 906,000 in the year up to June 2023, far surpassing previous estimates.

Approximately 1.3 million individuals moved to the UK during this period, while 414,000 people left.

According to the Office for National Statistics, net migration for the following 12 months was 728,000.

Even worse, we’ve had 1.9 million join the population in the last three years – but we didn’t build enough homes.

That’s an influx of people without us having adequate housing and infrastructure in place which makes that level of migration simply unsustainable.

If you want a reason for increasing rents, tenant campaign groups, it’s right there in the government data. It’s not ‘greedy landlords’.

Reason for higher rents

Another reason for higher rents is the increasing regulation that must be paid for.

All landlords know this and the notion that we must upgrade rental homes to be a minimum EPC rating of C is also unsustainable.

This missive only affects the PRS but not social landlords or, indeed, any other property owner. Including the government.

Instead, we are expected to shell out vast amounts of money to improve the energy performance with a payback of just a few hundred pounds a year.

Again, that’s a reason to put rents up to pay for the capital cost – so tenants can save a few quid on their bills. But that’s nullified by the rent increase.

Exodus of landlords

All the while, the government continues to deny an exodus of landlords – but it’s hard to ignore that many landlords are indeed leaving the market.

Not only do landlord organisations say this happening, but those independent voices carrying out PRS surveys such as RICS and Rightmove also see what is going on.

Many landlords won’t want the hassle of meeting the EPC 2030 deadline, but the Renters’ Rights Bill is another point of contention.

Although the government’s impact assessment claims it will only cost each landlord £12, experts have debunked these figures as unrealistic.

It’s going to be a lot more – to help push up rents – and yet no one listens.

Landlords exiting the market

With so many new residents moving to the UK and landlords exiting the market, one has to wonder if anyone in government can foresee the consequences.

The vast majority of landlords take pride in providing affordable, safe housing for families and we don’t need selective licensing cons to convince us otherwise.

I keep reading that councils say that conditions will improve – but there’s never any talk of how this will happen.

Councils aren’t interested in finding criminal landlords ignoring the rules only legitimate, law-abiding landlords who fulfil the criteria – and still get bashed.

I’m glad too that Landlord Licensing & Defence flagged up a report earlier this week that councils are barely prosecuting landlords for breaching the rules.

Well, they won’t will they when a civil fine lines the pockets of the council? The lawyers who did the research about councils appear not to have noticed this issue.

But you know, blah blah, bad landlords, blah blah, get away without being punished, blah blah.

Service provided by landlords

If our politicians genuinely cared about housing issues, they would acknowledge the valuable service provided by 99% of landlords and focus on allowing us to thrive while addressing criminal operators.

Instead of persecuting good landlords with taxes and red tape that ultimately raise rents and harm tenants, they should invest in building more homes.

Politicians’ efforts are misplaced and ineffective though I do wonder what the long term aim is.

Many of us feel unfairly labelled as bad actors simply because we sell properties when tenants vacate.

That’s because we aren’t interested in spending money on the EPC nonsense, or signing up to a selective licensing scam and the prospect of not having Section 21 is frightening.

Automatic annual rent increases

So, thanks to our politicians, welcome to a new era of stringent referencing requirements, mandatory home-owning guarantors for tenancies, and automatic annual rent increases starting at maximum prices to avoid bidding wars.

For those with buy to let mortgages dealing with non-paying tenants, it can take a year to 16 months to get an eviction but not get paid the arrears.

Why take that risk? If your borrowings are highly geared, you’ll be snookered with just one non-paying tenant.

But there’s a harsh reality about to unload itself onto the PRS.

For many landlords, the numbers no longer add up, and the stress is overwhelming – there must be loads of landlords struggling with mental health issues out there.

Politicians can do the maths just like us; many are landlords themselves – including at least one ‘rogue’ landlord – but they are actively avoiding addressing these issues.

Inconvenient truths?

When the next set of net migration figures show how many people have moved here and we have a full blown housing crisis because there’s nowhere for people to rent cheaply, what will happen?

I’m betting that landlords will be hit really hard for pushing up rents to unaffordable levels – while ignoring the antics of governments over the past 20 years.

The real shame is that people on low incomes who deserve a lovely, warm and well presented house won’t be able to get one.

There won’t be any. None. And when that penny finally drops about the whys and who is to blame, then perhaps things will change.

Until next time,

The Landlord Crusader


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Dizzy

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10:47 AM, 29th November 2024, About 4 days ago

After the apparent success of the petition calling for another election why don't we set up one stating the problems current legislation is posing for landlords and the knock on negative effect this will have on tenants?

JaSam

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11:09 AM, 29th November 2024, About 4 days ago

Not exiting yet but I’m not planning to buy any more residential BTLs the ROI for risk is just not worth the hassle. Not concerned about EPC as it will never happen. RRB will push up rents but the extra stamp duty was the final nail for reinvestment. New tenants will be checked more through than ever before and will want a guarantor where previously wouldn’t even think of. PRS is about to get a whole lot painful for landlords and tenants. Will it be worth it? I guess time will tell

Cider Drinker

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18:24 PM, 29th November 2024, About 3 days ago

But Labour have a plan.

They are encouraging wealthy individuals and companies to move abroad and building 1.5 million new homes.

They won’t build 1.5 million new homes.

With net migration at around 1 million per year already, it will rise as those gaining the golden ticket to remain on Treasury Island invite their families to join them. I’d be very surprised if net migration is not 6 million plus over 5 years.

Starmer may need to revise the figure for new homes. Or get Diane Abbott to do the sums.

GlanACC

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18:28 PM, 29th November 2024, About 3 days ago

I have just issued my 6 remaining tenants a rent increase for next year. On average they will get a £50 or £75 a month increase which will still leave the rent £150 to £200 under market rent (I don't have any mortgages so that's acceptable). I have also sent them a list of properties that were let locally for the past 2 months just to prove to them what the market rent is these days.

I did a quick drive around our estate and there were 27 properties for sale - a lot of them sold , but they were 2 or 3 beds - new landlords .. possibly but only a handful I guess.

Properties for rent were 7

Julian Lloyd

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9:24 AM, 30th November 2024, About 3 days ago

Reply to the comment left by Dizzy at 29/11/2024 - 10:47
Because there are probably only 150000 landlords in the country. Half of them are either corporate or have no idea what is going on or just rent to family. Of the few that are left only a small number will vote. So if we get say 30000 votes we will look sad and unsupported.
So I suggest we don’t do that. J

Cider Drinker

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10:00 AM, 30th November 2024, About 3 days ago

Reply to the comment left by Julian Lloyd at 30/11/2024 - 09:24
The legislation impacts both landlords and tenants adversely.

Everything that increases a landlord’s costs forces rents higher.

A cleverly worded petition could gain many more votes than there are landlords if educated tenants were attracted to it.

Julian Lloyd

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10:43 AM, 30th November 2024, About 3 days ago

Reply to the comment left by Cider Drinker at 29/11/2024 - 18:24Pennycook announced yesterday that there are problems with building those 1.5M homes. No s#1t Sherlock.
It won’t happen.

JamesB

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11:34 AM, 30th November 2024, About 3 days ago

Reply to the comment left by Julian Lloyd at 30/11/2024 - 10:43
Won't be anything like 300,000 this year so will need to be way more than 300000 a year for the next 4 years. Not going to happen.

It reminds me of friends in the 1990s who were saving for a house deposit whilst renting a flat. They claimed that they saved £500 a month. After 2 years renting they had £3000 saved. When I asked them how that worked out with £500 a month they said "well that month we had a holiday, that month we had to pay car insurance and so on." They still felt that in general they saved £500 pcm.

It's the same sort of dodgy maths that ignores reality.

Desert Rat

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23:31 PM, 1st December 2024, About A day ago

I've seen the rental crisis in Ireland that has been going on for years and the country is desperate for rental houses, last year there were whole counties that didn't have a single house to rent on daft.ie , but they still keep hitting landlords and fail to admit that the government legislation has caused the problem.

It's now a similar situation in Scotland and the UK is going to be next.

When will they learn?

This year is the first year that I've increased rents, and due to government legislation, I used to just not increase for long term tenants. I'm probably going to do it every year now to try to get my rent's inline with the current market rent. Tenants can thank the government for this.

Stella

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0:05 AM, 2nd December 2024, About A day ago

Reply to the comment left by Desert Rat at 01/12/2024 - 23:31
It is very sad to see the amount of homeless people especially in Dublin.

I heard that they are trying to reverse this situation now and landlords are being offered incentives to return but they are not having much success.

It will probably be worse in the UK once we have the RRB because some london councils already have up to 35,000 homeless people on waiting lists.

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