The growing number of buy-to-let landlords exiting the private rented sector (PRS), owed largely to an increase in regulation and taxes, is a major cause for concern, and an issue that the government can no longer afford to ignore, according to TV presenter Phil Spencer and Vanessa Warwick, co-founder of PropertyTribes,
A number of BTL landlords have divested their portfolios and left the private rented sector (PRS) in recent years and this has led to a significant reduction in the supply of much needed privately rented homes across many parts of the country.
“The more landlords who sell up, the less rental properties there are, and therefore the rents are increasing,” said Spencer. “A mass exodus of landlords is a catastrophe for the country.”
Spencer, during a discussion with Warwick, which you can see view below, pointed out that close to five million people reside in the PRS, and “they all need somewhere to live”.
Tax hikes, including stamp duty changes on buy-to-let and the loss of tax-free allowances, have driven away some landlords and crippled the PRS, with most property professionals, including agents, acknowledging that being a landlord is now much harder than it was say five years ago.
National journalists at the BBC have started to conduct research into the PRS and what lies behind the shortage of stock, and this is something that Warwick makes reference to.
With the UK government’s Renters’ Reforms White Paper looming, the consultation on A new Deal for Tenants in Scotland and legislation coming into force including the Renting Homes (Wales) Act and the Private Tenancies Bill in Northern Ireland it seems no landlord or agent is safe from further regulation.
Warwick said: “Landlords are being hammered from all quarters and a lot of them are leaving, as their margins are really thin.”
“New landlords are not coming into the sector, reflecting the challenging environment at the moment,” she added.
The UK has had a net loss of 230,000 PRS properties from sector since 2017 (data from the Government itself).
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Having seen your stats and graphs on FB I think the press and particularly EYE should be doing an article around your knowledge Chris. Thank you for sharing your work.
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The unintended consequence of Shelter’s vendetta against private landlords. They have done more to harm tenants in the form of rising rents than they have to help them…
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I have only been a landlady of 10 years, in my experience the last three years tenants have left my properties filthy, they have little respect of the properties.
Allowing small minor issues to become. Bigger costly problems such as ( seal on the shower screen left not closed when using the shower allowing water to run onto the floor over time damaged kitchen ceiling ( tenants daughter over fills bath and caused another leak damages ceiling) (her excuse was not my problems it’s maintenance can’t prove she left the bath to over fill )
Scratches Solid Oak floors as using kitchen as an office and the wheeled chair had damaged all the flooring ( TDS classes a wear and tear)
Food splattered on all Dec, walls, doors, her excuse it was here when she moved in, property newly decorated costs £3000k pounds in 2019) ( TDS it’s 3 years of wear ) how can this be classed as wear when a tenant throws food on walls ?? Makeup and coffee rings in all wood surfaces.. ( WOW)
(Gardens are a huge issue as tenant now feel it’s not there problem to cut grass and weed) Again TDS plants grow – tenants can’t been expected to cut back 3 year of growth ?? WTH
The government needs to stop protecting tenants and start to protect GOOD landlords that have there properties abused by so called good tenants.
basics cleaning as we all do should be kept up too, why can’t you tell a tenant how to keep your property clean – who doesnt clean the windows once a months ? Who doesn’t vacuums 2/3 times a week, who leaves cloths to dry on radiators and damages deco and rust the radiators ?
What kind of people spill food and drink on doors and floors and not wipe it up ?
What kind of people iron into a carpet Floor?
What kind of people cut on a worktop and damage it ?
what kind of people don’t clean ovens and hobs and extractor hood monthly ?
What kind of people are been brought up to disrespect home these days?
Why is this acceptable to disrespect the homes they are given to rent ?? We are providing a service to these tenants are we not?
So far the cost too put this property back to a my let-able standard £4250.00
it cost me 3k three years ago to do the very same, I just about broke even and now will be ( running a loss ) for another three years- four years again.
My parents brought me up to respect my surrounds and the belonging in them to close doors carefully to not rag taps and handles to clean up after myself ect, this was instilled into my by the time I was 12 years old, my parents where not strict but shown me how to be come a person if good charter and have good standards.
Now this tenant is a professional good references and had an interview before we proceeded ( it will now show you how clean in my tenant in her references or the lack of respect to one’s property, inspection 4 a year show her untidy but only when the house is empty is when hit see the true colours )
Rant over
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Welcome to the real world. The standards you are expecting are perhaps very high and where renters often feel they do not own it therefore do not have your standards. Having said that it is reasonable to expect them to keep the property is decent clean condition and return the property with a reasonble level of wear and tear. There are areas where you need to protect yourself as much as you can and these start at the start of any letting. A very detail and highly annotated schedule of condition is essential to be able to address the TDS where tenants are always given the benefit of the doubt. Taking tenants to court if the TDS are unreasonable is an option but you must have excellent evidence (thus the standard of the inventory is of prime importance). The most important is at referencing tenants and tenenat selection. No one is fool proof but in recent years I look closer and closer at people before I accept them as a tenant. How they respond and present themselves often gives a clue as to their approach to life. eg those turning up late and not apologising is a prime example of who to not let to. Perhaps you should ask to interview your prospective tenants in their current property as this would give you a good insight into their living standards? If they do not allow this tread with extreme caution. Letting agents will not go this far as it would not be economic. As the market gets more difficult and the soon to be loss of s21 my standards will harden even further. I work on the basis it is better empty than a bad tenant in place and this approach will harden as it becomes almost imposible to remove bad tennats. You have to accept renting is a business and that risks are there and you need to cover these in the rent you charge. A good tenant is an asset to be looked after a bad one you just don’t need.
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Unfortunately Environmental Health Officer are trained to say that Agents and Landlords cannot tell their tenants how they should live. If you self manage it is much harder to get out of these difficult situations because it becomes personal and it is difficult to detach your emotions. A good managing agent is like a great football referee in that they apply the law, they can be matter of fact when they do the interim inspections and your inventory is the equivalent of VAR if the tenant does not look after everything in a proper manner.
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Leelee30 l wholly agree with you. l have been a landlady for 12 years, and it has gradually become more and more difficult to continue. And Will2, l def dont agree LeeLee30 standards are too high. l have just given a tenant a Section 21 the stat 2 x months notice to leave. (tenants only have to give 1 x month notice to leave! Why?) The section21 letter is SO sided with the tenant, l was shocked to read it! It suggests the tenant might not have to leave after 2 x months etc etc. Now l am having to take tenant to court (tenant knows legally can stay in the house while waiting poss 4 x months !) Even then tenant can legally stay in the house another 42 days, even then possibly l need to employ bailiffs. lts all wrong! l am all for whats fair in life. This hugely is not fair. l am selling up asap…which is a shame for good respectful tenants, because my area will lose good rental houses…along with me, a very good landlord!
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I’m sorry Mrs Hunch, you think it’s disrespectful to not vacuum 2 to 3 times a week?
In the last 3 years your asset has appreciated by over 20%, so the sob story of only breaking even will get little sympathy from the vast majority of the population.
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So you do not clean then ?
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So with that logic, because a landlord has made property through capital appreciation, then a tenant can do what they like?
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Maybe your choice of words gives the wrong impression of your views? Picking out one small point of several made and ignoring the rest is a little unfair?
I do agree though that the vast majority naively still view private landlords as leeches, and have no clue of the importance of the PRS to society and the economy. This perhaps reflects common fashion to revere Public Sector workers as Angels, and to damn entrepreneurs as Imps, without understanding where funding for the Public Sector actually comes from.
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I agree that you probably don’t need to hoover 3 times a week to be ‘clean’ and the OP clearly has more time than I do for such things.
But, why would the fact you rent have any bearing on your pride and standards as a person?
Renting doesn’t mean I want to live with food up my walls, iron burns in my carpets and a garden I pay rent for, but can’t enjoy, because it looks like a forest! That is basic pride to keep a clean and tidy home. Quite honestly, if my home is a mess it depresses me and I find it more difficult to function as an individual.
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What on earth has capital growth got to do with common sense and politeness? Breaking even is the norm for many landlords now that taxation and legislation has changed. It’s a bit like saying someone should not get growth in their pension fund because for many landlords, investing in a property is just that, a pension fund.
Disrespect is becoming endemic in the younger generation, social media is full of videos of people in authority such as police being attacked; years ago that person filming would have defended authority, nowadays they mock it.
As a landlord for almost 30 years, I’m out, as soon as my last tenant gives notice, the property will be sold, no longer my problem!
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So you do not clean then ?
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Government are so good at getting it wrong! Perhaps politicians need some real life experience.
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Agreed get Starmer Corbyn and Abbott in LOL
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Sure get them in Room 101 with the rest of the politicians.
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When being a private landlord will become a criminal offense.
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Things are worse in Wales where we have had a Labour held Assembly for over 20 years. Julie James, Housing Minister has pushed through a completely new law that replaces the Housing Act 1988, so after 15th July, there will be no more ASTs, tenants become “contract holders”, the property becomes “the dwelling”, 6-month “no fault” possession notices, etc. Ms James is a qualified barrister, but as the First Minister and most of the cabinet, they have only worked for local government or quangos and have no experience of the Real World. The WAG new “Standard Contract” template is badly flawed and runs to 39 pages. I wonder many tenants will read and understand it all, and self managing Landlords will find it impossible so will sell up.
A law is only as good as the government’s ability to enforce it.
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There are still the same number of properties. As the PRS shrinks, home ownership grows.
The problem is the general shortage of housing causing both rents and house prices to soar.
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And this is exactly the point. Government use smoke and mirrors to make it appear that the issue is with LL’s and Shelter and Acron and the like help them do this. The issue is not with landlords, it is with governments’ chronic inability to provide enough housing for a growing population. Period.
Landlords provide a vital service as there is no longer investment into government-owned housing stock and, whilst it would be lovely if everyone could own their own home, personal circumstances for some dictate that this is not (and may not ever be) possible.
But the really sad bottom line of this whole situation is that the likes of lobbying from Shelter, Acorn et al and the government’s determination to pass the blame to everyone else rather than take ownership of these issues is that it is, as usual, the most vulnerable in society that will suffer as landlords leave the market as property no longer represents an equitably viable option for them moving forward and the risk of having a potentially bad tenant/tenants increases or they are dictated to as to how to run their privately owned assets.
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The problem with this reasoning is that one OO house does not equal one rented house in occupation density. The frequent and lazy assumption that a loss of PRS housing is offset exactly by an equal gain in OO housing (“the houses don’t disappear”) is false. Some years ago I read a statistic that OOs occupy 33 square metres and renters 25, so that a 100 sq m house would accommodate four people as tenants, but only three as OOs. In effect the houses do disappear.
To take an extreme example, a five-bedroom, three-reception house converted into an HMO could conceivably accommodate 16 people (eight couples). If that is sold out of the PRS, it’s not going to be occupied by a family of 16; it’s going to be sold to a family of five.
The same principle is true even if we’re talking a two-bed flat. When I lived in mine, it housed me. Since I started letting it out 18 years ago, it has only ever housed couples (it was once rented by a single woman, balanced by a later occasion when it was rented by three people).
When landlords under tax and regulatory attack divest these properties, only 5 of the 11 occupants remain housed. The others are evicted and left looking for another rental from a supply that has just shrunk.
There are 4.4 PRS households which if occupied at 4/3rds of the density of the rest must be housing about 15 million renters. If every last one of those were sold into owner occupation, they’d only house three-quarters of the present occupants. The remaining 3 or 4 million evicted renters would become homeless.
This is the path we are on, those in government persistently attacking landlords have not bothered to think this through, and while we’re not seeing them become homeless yet, we soon will.
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Vanessa: your valid and logical suggestions are howling at the moon. It was the current Regime that brought them all in; they will never be reversed. This Con-servative party is no longer the party of business and free markets, and there are no alternatives in our 3-party country.
Trust has been irreparably damaged by the Con artists. Too late to persuade small portfolio landlords like myself to stay in the sector.
But let’s say they did reverse S.24 next April. Not that that would be anywhere good enough, who in God’s name is going to trust them not to reverse it again the following year?
There are several tougher landlords who are going to stick it out, perhaps they have much greater margins, or higher capital resources available from years of being in the business and have much larger equity bases. Good luck to them, but us weaners have been beaten.
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Interesting political statement considering Wales is Labour and Scotland SNP and have the same issues as England.
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Wales is worse. Have a look at the Housing (Wales) Act 2016 and their new template on the WAG website.
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