BTL changes signal worrying times for landlords and tenants
Recent changes to lettings legislation and the rise in stamp duty have meant that it’s already proving to be a challenging year for a number of landlords. The Government have wanted to make strides towards making home ownership a more accessible prospect; however in a number of cases this seems to be at the expense of landlords.
With added layers of checks and levies placed on landlords, we’re in danger of seeing a massive downturn of supply in the private rented sector (PRS). David Cox, the managing director of ARLA has expressed his concerns that increased stamp duty on additional properties will deter many landlords, triggering a supply and demand crisis that will result in increased rent prices. Already we’re seeing a huge lack in supply and an ever growing demand for private rental properties. It’s no real surprise that this will become more extreme as we see landlords look to strategically downsize their portfolio due to the increased expense of owning a buy to let property.
At GFW Letting I work with a number of landlords whose portfolio sizes differ dramatically. Following the rise in stamp duty, we’ve seen an increase in the number of landlords concerned by the mounting costs they are faced with. This will inevitably have the unfavourable consequence of seeing rent prices increase from landlords shouldering the increased costs they face. The result? The standard that properties are kept to in the PRS will inevitably decline, as landlords have less available cash to maintain and repair, the rising rents will mean that tenants are even less able to save monies towards a deposit to buy; which in turn will create a vicious circle as Generation Rent are pushed further away from homeownership.
The piecemeal approach to lettings legislation, along with the recent changes above is not going any way to improving the standards and supply in the PRS. What we need to see is more guidance and sensible legislation introduced to control the PRS more effectively, more housebuilding to satisfy the ever growing demand for homes along with support to help people afford to buy a home. It is only when we’ve reached that balance that we can start to build a brighter future; making home ownership a more achievable goal without the expense of pushing rental prices up. We need to see dramatic improvements that encourage landlords to invest in and maintain homes to a good standard, as home ownership is not an option wanted by or available to all.
If you’re an existing landlord, or you’re considering investing in a buy to let property and would like to discuss the current market, feel free to email me, or call me on 0191 2847171. I’m always happy to offer advice or guidance.