Wild west policy changes are damaging landlord confidence

by Property 118

9:01 AM, 12th September 2019
About 5 days ago

Wild west policy changes are damaging landlord confidence

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Wild west policy changes are damaging landlord confidence

The August 2019 RICS Residential Market Survey show tenant demand increased for an eighth month in succession, as a net balance of +23% of contributors cited a pick-up (non-seasonally adjusted figures). Set against this, landlord instructions remain in decline, an ongoing trend stretching all the way back to 2016. Given the consistent imbalance between rising demand and falling supply, rents are seen being squeezed higher over the next three months.

Hew Edgar, RICS Head of UK Government Relations and City said: “The ever-changing policy landscape is damaging confidence in the lettings market. But the Private Rented Sector (PRS) has the enormous potential to deliver more homes that are urgently needed, and to contribute to the alleviation of the affordability issues which are being exacerbated by the ongoing dearth of supply across all tenures.

“The need for the regulation of property agents including those operating in the PRS is critical in order to make the sector more attractive to landlords, and of equal importance, enhance the landlord-tenant relationship. To assist this recommended regulation, we are working with industry to develop an approved PRS Code of Practice. We have also worked with Lord Best as part of his Regulation of Property Agents (ROPA) working group, to help bring positive change and increase public confidence in the sector; parts of which have been likened to the ‘wild west.'”

Market Survey results also point to a renewed deterioration in property sales expectations over the near term, with survey respondents predicting a further decline in activity over the three months to come. Brexit uncertainty is unsurprisingly a significant factor causing the hesitation for both buyers and sellers.

Near term sales expectations fell from a net balance of -4% to -23%, representing the poorest return since February this year. Furthermore, sales expectations have weakened in almost all parts of the UK over the past two months. Things are expected to improve, albeit only very modestly, at the 12-month horizon.

As positivity has leaked out of the market, August also saw flat demand from new buyers, after a couple of months where enquiries from potential purchasers had increased somewhat.

In the near term, prices are expected to fall at the national level, with a net balance of -24% of survey participants anticipating a decline over the coming three months (down from -13% last time out). Nevertheless, at the 12-month time horizon, a net balance of +12% of respondents project prices will increase.



Comments

Simon Williams

10:51 AM, 12th September 2019
About 5 days ago

On Monday I advertised two rooms in an HMO in Cambridge and received 103 responses in the first 24 hours. That's more than in pre-Brexit days. It's gone mental.

So many of these people start their emails by saying something like "I have to leave my current place because the landlord is selling".

If you keep squeezing the PRS, it will eventually have an impact.

Ian Narbeth

10:56 AM, 12th September 2019
About 5 days ago

The problem is not: "The need for the regulation of property agents including those operating in the PRS is critical in order to make the sector more attractive to landlords, and of equal importance, enhance the landlord-tenant relationship". The problem is burden after burden being placed upon landlords' backs, obstacle after obstacle being put in their path and punishment after punishment being threatened for minor or technical breaches of ever more complex rules. The honest conscientious landlord has to comply at great cost while the bad landlord does not care if he is in breach of 20 rules or 10 rules and ends up with a competitive advantage over the compliant landlord.
In the meantime, Councils are under-resourced. They also go after "low hanging fruit", namely the non-rogue landlord who is easy to find. Under the Tenant Fees Act they are tasked with pursuing landlords who take a holding deposit that is 10 pence more than the maximum allowed but they don't have the resources to deal with the beds in sheds merchants who put their tenants' lives in danger.
The PRS does not need more regulation. We need sensible regulation properly enforced in a reasonable manner.

Peter G

14:51 PM, 12th September 2019
About 5 days ago

Making it hard to remove tenants with arrears or bad behaviour is also contributing to Landlords leaving the business. It takes so many months to process a Section 8 or Section 21 that the Landlord is thousands of pounds out of pocket for no fault of their own. This is the true meaning of a "no fault" eviction using Section 21.
There needs to be speed and a fair attitude by the Courts to evict tenants who are being unreasonable by their behaviour or in arrears with rent. Threats to remove the option of a Section 21 eviction device is the last straw and will just cause many Landlords to quit as it has been a key protection for them, albeit slow.
What other businesses are having the laws that protect them being removed? What other businesses are being told their finance costs will be taxed as "income"?
It's appalling, and I doubt any Landlords will be voting Tory OR Labour at the next General Election.

Gary Nock

18:33 PM, 12th September 2019
About 4 days ago

Reply to the comment left by Ian Narbeth at 12/09/2019 - 10:56
Well said Ian. As landlords and agents we are being battered into submission on the altar of perceived political gain. The species "Landlordius" is being hunted to extinction by political predators in the Westminster Bubble. I put a 2 bed house on the portals. I had 22 applicants. It was the only 2 bed in the entire postcode. And the rent was £50 higher than the last time it was let as the landlord has been hit with Section 24 tax increases, SDLT, and increased agent fees as a result of the draconian Tenant Fee Ban. Well done Polly Neate at Shelter and Dan Craw Generation Rent. Special thanks also to Jeremy Corbyn and John Mcdonnell for stirring up anti- landlord and anti-agent sentiment, reducing supply and increasing rents.

Mick Roberts

7:33 AM, 13th September 2019
About 4 days ago

Reply to the comment left by Ian Narbeth at 12/09/2019 - 10:56
Great words Ian:
The honest conscientious landlord has to comply at great cost while the bad landlord does not care if he is in breach of 20 rules or 10 rules and ends up with a competitive advantage over the compliant landlord.

I always try & make a positive out of a negative & had a girl move back in her Mums last week after 3.5 years. I toy with selling, as had enough of everything including dealing with builders on full refurbs which are between 6 & 12k roughly. As when come empty, I was doing full refurb & leave with Letting Agent.

However even in the last 9 months (It was already bad for tenants), things have got much worse for tenants in the terms of supply, so much so, that I han't got to touch this house, not even a drop of paint-It's all legal-But I'd only give it a 4 out of 10, & I like to Letting Agent them at 10 out 10. Ooh & I'm charging more rent-Have to, to pay for these Draconian charges & whatever next.

So now, a tenant has got a worse house than he would have done. And is now paying more rent. That is Govt & Council Policies for u. There is no competition for the remaining Landlords.

Let Landlords do what they want as long as it's legal. Stop giving em all these charges which the tenants end up paying. And landlords will stop exiting, more Landlords will enter, tenants will have more choice, landlords will have to up their game.

Whiteskifreak Surrey

7:55 AM, 13th September 2019
About 4 days ago

Reply to the comment left by Mick Roberts at 13/09/2019 - 07:33
Great idea Mick - I and I am sure all other good LLs are all for it. But sadly our government (and other of all colours and ideology), GR, Shelter and others do not have a minimum common sense, let alone any, even basic, business/economic knowledge.
Frankly speaking, I do not believe that BoJo the Clown would help us much if at all. If Labour is in, it will be time to sell everything and let those Red Idiots to deal with that. Then pack up and go to Malta.
Honestly, I have never thought this country can be soooo terrible.


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