220,000 less landlords in the PRS 😱😱😱
Hamptons claims there are over 220,000 less landlords in the PRS due to the impact of policy changes.
So what does that mean...?
For those of you that read my 30%APR Store card story you will know exactly what I’m on about. It’s been popular for a few years now to bash “evil, fatcat, money-grabbing” landlords. The powers that be have cottoned on to this and, targeting the younger voters, responded with tax increases, increased regulation and generally landlords got a negative vibe from Parliament, this probably to promote the widespread idea that homeownership is a must for most. Shame!
What has happened is exactly as predicted really. Younger voters are keen because hey, who wouldn’t want a stab at the people who you’re paying this rent to, right? The attack on the PRS has left many a battle scar, but before I go into that I would like to take a moment and thank the government for the Help to Buy system. Under this scheme the government will loan a substantial chunk of the buyer’s deposit interest free for 5 years. Free money! Guess what happens though when these young buyers have free money though..? Right, they’ll spend it. As a consequence developers have now been accused of profiteering because they have all this government money pumped into their pockets through this Help-to-Buy scheme… Just can’t win, us property folk, can we??
Back to my train of thought. So:
1. Purchase prices have actually gone up (for new builds that is, older (rental) housing stock doesn’t seem to be going up as much because of less incentives (if any) and also the flood of these ex-rentals on to the sales market. As ever, the younger generation prefers to pay more and move right in, so a doer upper is normally not a consideration.
2. There is less rental supply, mainly due to landlords selling up.
3. What rental stock there is left is run by and large by bigger, more astute, professional landlords. They know how to maintain property well and charge accordingly. That, combined with
4. The ban on tenant fees and cap on deposits means it is less outlay for tenants to get into rented accomodation, but again these fees are just loaded into the rental price.
Perhaps the last item there was done in order to create a more fluid rental market, but in my humble opinion the UK Rental market is fluid enough. In Germany for example renters are expected to commit for much longer terms and are, often times, even responsible for furnishing the place with a kitchen. Assured Shorthold Tenancies are anything one month upwards, so commitment isn’t a problem, but I guess the government wanted to lower the financial barriers to entry…
So as a result of the “attack” on the PRS the government and its clan of generation renters has succeeded not only in reducing the choice available to renters but also increasing the price of everything that is left! The number of landlords has fallen to the lowest level in seven years. There were 2.58 million landlords in Great Britain in 2017, now down by some 222,000 according to Hamptons. That’s cold hard data there!
What do you think is the future of the PRS? Comment down below and tell me your thoughts!
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