The government’s attack on the buy-to-let sector could lead to 500,000 rental properties being sold in the next 12 months, according to the National Landlords Association.
This would be followed by another 100,000 sold each year up to 2021, shrinking the UK private rental sector by 136,000 properties.
The trade body said that the number of landlords looking to sell in next 12 months has more than doubled since July last year from 7% to 19% and that confidence in the buy-to-let sector has now hit such a low it is worse than “levels witnessed during the financial crash”.
The NLA said that confidence in the buy-to-let sector is now 5% lower than after the financial crash in 2007 as a result of the government’s efforts to dampen the buy-to-let market and increase home ownership.
From 1 April, landlords and second home owners will have to pay extra stamp duty of 3%. Critics have pointed out that this could result in an increase in rents as landlords look to recoup losses.
The amount of tax relief landlords can claim on properties will also fall from April 2017.
Confidence in landlords’ business expectations has gone from 67% to an all-time low of 43% in the past year.
Lambert said: “Up to half a million properties could come onto the market as a result of the Summer Budget and Autumn Statement, which the Chancellor will no doubt deem a success.
“But there is no guarantee that these will be the one or two-bedroom flats or small houses that will appeal to first-time buyers, especially as landlords are more likely to offload less desirable stock in less desirable areas.
“We’ve always said that Mr Osborne is blinded to the impact of his decisions by his commitment to homeownership. He may have intended to focus on the small-scale part-time investor, but it’s the larger and more professional landlords who will be hit worst by cuts to mortgage tax relief and increases to stamp duty, and who appear most likely to leave the sector.
“What happens to the people these landlords house if they still can’t buy and there are fewer and fewer properties available to rent?”
I think the whole policy change is a huge, short-sighted mistake. I think that in the short term rents will go up, meaning those who can’t afford to buy will be even less able to save up to buy. I will be very surprised if property prices for larger properties don’t start to fall, and I think prices for smaller properties will go up, making it harder still for people to get on the property ladder.
I’m frankly not sure what the objective of this policy is (other than attacking small-scale landlords) but I’m pretty sure this isn’t the way to achieve it.
So there will be a 136,000-property shortfall inside of five years?
Meanwhile, large build-to-let investment is responsible for just 21,400 residential units in the UK, some of which are only in the planning or development stages (and two thirds of which are in London). To put that into context, REITs were first introduced in 2007, and as of 2011, only 1 out of 23 was engaged in residential property construction.
If the government hopes for an influx of corporate money to make up for any deficit in the PRS, this is woefully inadequate.
I’m not sure what the implications will be , but going off the point a bit here I only know that the whole housing and private rental system needs a complete review. From my own experience I have found private renting a greedy market with greedy landlords renting out overpriced poorly kept properties at the expense of tenants. Everyone only needs one home.
I have found that now as so many estate agents are taking over the management of properties , landlords do not meet perspective tenants creating cherry picking of tenants on paper, chosing tenants who have professions which the landlord admires.
It is a disheartening time looking for a home if you do not fit into societies perceived idea of a desirable tenant which is profession and income based.
What about creative people and the self employed , God forbid if your a family or have the cheek to own a pet.
In France it is actually illegal to discriminate over tenants with pets!
I have experienced the most stressful time in my renting life relocating to Bristol from Devon. It took me 5mths to eventually find a home for me and my family. I found all sorts of discrimination because I work part time as a nurse and my husband is a self employed artist ( with accounts for 10 yrs) oh yes and we have a beloved family pet dog! , nothing to do with us not being able to afford the rent but because of cherry picking.
It’s an unfair game at the moment , and I really wish I owned my own home so I wouldn’t have to be made to feel like a second class citizen.
The whole system needs looking at, and don’t get me started on agents rip off fees!! What exactly do they do for £300-500 ?? I recently had £200 of my £400 holding fee taken off me (and I only got that after consistently arguing my case!)by an estate agent because I decided to not go thru with a rental after discovering there was only one night storage heater ( by the front door) in a 3 bedroom house (£950 pcm) and the landlord would not put in any more heating!
Ideally I don’t think housing is an area to encourage buissness, as in my eyes I see too many people buying up way to many properties to make a quick buck!
Let’s remember housing is a basic human right. The cost of properties and private rents in this country is shameful.
I would love to see landlords having a more hands on approach to renting out their properties, as it used to be. All I see is scaremongering from agents , fuelling fear of the dreaded tenant who never pays the rent, or neglects the property. Landlords need to get a feel of the tenant by meeting them.
Rant done , thank you.