Despite demand for rental property being at an all-time high, the number of landlords planning to sell their properties has reached its highest rate on record.
Recent research by BVA-BDRC found that a third – 33% – of private landlords in England and Wales plan to cut the number of properties they rent out.
By contrast, just 10% of landlords now say they plan to increase the number of properties they rent out.
With demand for properties from prospective tenants increasing in almost every region of England and Wales, the National Residential Landlords Association is warning that the supply crisis is set to deepen further without action by ministers, and that is a viewed shared by many letting agents up and own the country, including Nicol & Co.
The company is urging BTL landlords to hold fire on plans to sell up and exit the rental marketplace.
James Gwynne, letting manager at Nicol & Co., which has offices in Droitwich, Worcester and Malvern, said: “The message for now to landlords across the sector from us is essentially, don’t fret.
“There are still huge benefits in letting your property and when a change like this occurs, a new normal will be established. The best advice I can give is that now is a good time to communicate with your local managing agent with any queries.”
As it stands, the Renters (Reform) Bill provides for:
- Abolishing Section 21 “no fault evictions”
- A move to periodic tenancies and the removal of assured short-hold tenancies
- Strengthening Section 8 grounds – particularly for anti-social tenants
- Reforming the courts process – with new digital processes to reduce delays
- A new Ombudsman and digital Property Portal
- Further legal rights for tenants to request a pet in their rental property – with tenants expected to get pet insurance or to pay for the landlord’s pet damage insurance
- Applying the Decent Homes Standard to private rented sector for the first time
- Stopping landlords and agents from issuing blanket bans for tenants on benefits, or with families
- Strengthening enforcement powers for councils
Gwynne continued: “There is a concern among agents and landlords alike that certain areas of the bill will result in more landlords leaving the sector due to tighter regulations and more complications on ending an unwelcome tenancy.
“While I don’t completely agree with the proposals, ultimately the government will need to add some incentives in at some point to keep landlords in the market.
“They do not currently have an alternative solution to social housing and if more landlords leave the sector, it will negatively impact tenants – the opposite of the government’s intentions.”
But he stressed that the benefits contained in the Bill should not be overlooked.
He explained: “As long as the strengthening of the Section 8 notice is made relatively straightforward and the court application process is not too legislatively complicated, then landlords should still be able to take comfort if needing to give notice for the more obvious reasons, for example, if they need to sell or move back in.
“The new ombudsman process should make the resolution of disputes easier, plus having a regulating body to listen to arguments on both sides might give the government a better overall view of the sector, resulting in better, more refined and balanced legislation for the sector in the long run.
“Having a ‘Decent Homes Standard’ will help to reward landlords who look after their tenants and provide well-run properties. This should also help to ease the bad ones out of the system.”
Gwynne added: “Landlords need to take a long-term view, which includes not only rental which, according to figures from JLL Predict, could see cumulative growth in rental values of 15.9% in five years to 2027, but also increased capital gain over the long term.
“We believe that the government still needs to look at how to incentivise landlords but landlords also need to look at the benefits of remaining in the market.”
