David Cox, managing director at the Association of Residential Letting Agents (ARLA) provides an overview of what we may see in the private rented sector in 2015.
Simply put, we need more houses. Demand continues to outstrip supply.
As new homes come on to the market at one end; from both foreign investors and landlords in London and South East who are buying up portfolios in the north of the country: we’re also seeing accidental landlords leaving the sector at the other end – they are no longer in the negative equity which forced them into the market during the housing crisis.
However, even with some increase in supply during 2015, we still expect to see growth in rental prices of around 2-3 per cent.
Immigration Act
The recent Immigration Act requirements on landlords, which are being trialled in the West Midlands, may be rolled out more widely in 2015.
Under the new Act, letting agents will be required to make ID checks to establish the immigration status of all prospective adult occupiers before a residential tenancy agreement is granted.
Whilst establishing ID checks for all adult occupiers is effectively converting best practice to law, it may push some vulnerable tenants into the arms of rogue operators.
Regulation
As the 2015 General Election looms, the colour of the next government will have a large impact on the rental market; particularly when it comes to regulation of the sector.
ARLA would like to see a fully regulated industry to build a better, stronger private rented sector, which will help to eradicate the rogue agents who tarnish our industry.
Labour is pro regulation but has also pledged to introduce three-year tenancy agreements with strict rules which will make it more difficult to evict tenants. This could see landlords pull out of the market.
Whatever the outcome of the election, considerable change is likely over the next five years. It could be a make or break time for the sector.
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