Increased tenants’ rights are coming at a cost – to tenants – as landlords are being driven out of the sector.
The warning has come from Dorian Gonsalves, CEO of Belvoir, which has reported that 72% of its franchisees are forecasting rent rises this year.
Gonsalves said that the reasons given are landlords incurring “considerable” extra charges in the wake of the tenancy fees ban.
They are also facing “punitive tax changes and ever-changing costly regulatory demands”, he said.
Gonsalves said: “Although the Government is trying to help tenants, reducing supply when demand is increasing is resulting in rents rising in those areas where tenants’ wages are increasing more than inflation.
“This means that although tenants may be getting more rights, it is coming at a cost.
“Moving forward, what is important is for the Government to implement a fair system that works for both landlords and tenants.
“Failure to do so is likely to result in a shortage of new rental properties, making it more difficult for tenants to find an affordable home.”
Separately, the UK’s two major landlord organisations have expressed their concern over the “drain” in rental supply.
The National Landlords Association and the Residential Landlords Association – whose planned merger is now weeks behind schedule – issued a joint statement calling for immediate action to reverse the decline in supply.
The statement says that landlords are selling more properties than they are buying, while others are switching to short-term holiday lets for tax reasons.
The NLA and RLA want a fundamental review of the way rental homes are taxed, to ensure that tax policy supports, “rather than contradicts”, government objectives.
Chris Norris, of the NLA, said: “The tax system with which landlords must contend is no longer fit for purpose.
“HM Treasury has constructed a series of barriers to investment which make running an efficient and successful lettings business borderline impossible.”
David Smith, of the RLA, said: “The tax system is failing. It encourages the provision of holiday homes over long-term properties to rent, it deters investment in new housing, and provides no support to those wanting to make energy efficient improvements.”