The exodus of landlords: How bad does it have to get?

Some critics, landlords and commentators say there isn’t a landlord exodus, but landlords are leaving – there is no doubt. So, while the term exodus makes people feel squeamish it’s like the look-out on the Titanic calling that massive iceberg ‘a chunk of ice’. We can play with words all we want but the truth of the matter is there for everyone to see.

This week, Property118 wrote about the latest Goodlord & Vouch State of the Lettings Industry Report which paints a stark picture of the UK’s rental market.

Landlords are increasingly leaving the sector, driven by a combination of factors including new legislation, rising costs and the challenges of managing rental properties.

This is before the Renters’ Rights Bill comes in and Labour pushes up CGT rates this month.

Whatever. This exodus is not only shrinking the supply of rental properties but also creating a crisis that could have far-reaching consequences for both landlords and tenants.

Landlords leaving the market

While the reasons for landlords leaving the market are understandable, the impact of their departure is likely to be severe.

As landlords, we know that as the supply of rental properties dwindles, competition among tenants will intensify, driving rents even higher.

This will make it increasingly difficult for many people to afford a decent home, particularly those on lower incomes.

But it will be landlords who will continually get the blame.

Apparently, we aren’t allowed to vote with our feet and cash-in on the money, time and expense – and invariably, aggro from tenants – that we have invested. We are always the whipping boy.

Growing housing crisis

We also know as landlords, that the government must take urgent steps to address this growing housing crisis.

One solution is to provide landlords with greater incentives to remain in the market.

This could include offering tax breaks, reducing regulatory burdens and providing financial support for property improvements – including for the nonsense EPC plans.

Claiming financial expenses and reintroducing the wear and tear allowance would also help.

As would building lots of new houses to boost housing supply.

Government fails to act

As things get worse and if the government fails to act, the consequences for tenants could be devastating.

Landlords are proud to house people and offer quality homes, but we’ll see more people being forced to live in overcrowded or substandard accommodation.

Plus, homeless numbers will rise – including families with children.

I can’t image the sleepless nights that good, honest landlords must feel when they decide to take possession knowing a family will struggle to find somewhere else to live.

But this will be a business decision and one that must be made.

PRS could become increasingly unstable

So, how long should the rest of us remain? The PRS could become increasingly unstable, with rents continually rising and criminal landlords taking advantage of tenant demand.

I’ve mentioned before that there needs to be a dialogue between landlords and the government before the situation gets out of hand.

Yes, the landlord’s house might be snapped up by another landlord – and lots are still buying – and a first-time buyer might invest.

But for those who can’t afford to buy or pay more rent then they’re stuck. I mean properly stuck.

There’ll be nowhere to rent, and the best offer will be a B&B.

No one voted for this but that conversation I mentioned needs to be an honest one with a frank exchange of views of why politicians have for years now been trying to chase us out of the sector.

Politicians and tenant campaign groups also need to understand the role they’ve played in making renting life worse and more expensive tenants.

Maligning every decent landlord

Finally, a word about my old friend Polly Neate and her leaving the housing charity, Shelter.

I take my hat off to someone who played a great PR game in maligning every decent landlord in the country while running a homelessness charity that didn’t house anyone. Not one person.

But the six-figure salary and the (undeserved) gong will be nice memories – though I suspect that getting out now before the disaster of the Renters’ Rights Bill hits is a canny move.

I’ve never agreed with a word you’ve said, Polly, but my God, dodging the ramifications of the abolition of Section 21 and the surefire increase in homelessness will be the testament you leave behind.

You should be ashamed of helping to create this disaster, but I suspect the plight of those about to be made homeless isn’t something you will lose sleep over.

Until next time,

The Landlord Crusader

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