0:05 AM, 15th October 2024, About 5 hours ago
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The future of the private rented sector (PRS) is a major worry for 75% of landlords, research reveals.
The findings from the Simply Business’s Landlord Report highlight that the year so far has been challenging for landlords.
They’ve seen increasing costs, evolving legislation and a new Labour government.
However, it is Labour’s victory in the July 2024 general election which has added to the uncertainty.
When asked about the new government’s impact on the rental market, 51% of landlords anticipated a very negative effect, 20% expected a slightly negative impact, 13% were unsure, 10% foresaw no impact, and only 6% predicted a positive outcome.
Simply Business’s chief operating officer, Bea Montoya, said: “Although most landlords welcome increased standards across the market, they need more clarity on regulations so they can prepare accordingly.
“And this starts with the Renters’ Right Bill, which marks the biggest changes to tenancy law in a generation.”
She added: “Insuring more than 300,000 landlords allows us to gain first-hand insight into the integral role they play in the housing market.
“But with three quarters of landlords concerned about the future of the private rental sector, it’s more important than ever to understand their challenges and perspective.”
A major concern for 69% of landlords is the constantly changing and confusing legislation.
The Renters’ Rights Bill, which promises the most significant changes in decades, is a focal point.
Key provisions include banning Section 21 evictions, allowing tenants to keep pets, limiting rent increases to once a year, ending blanket bans on tenants with children or benefits, and prohibiting bidding wars on rental properties.
However, the proposed ban on Section 21 evictions remains contentious.
Landlords believe it will make evictions more costly and time-consuming (69%), drive landlords out of the market (62%), and only 5% think it will simplify evicting tenants who breach agreements.
Despite 71% of landlords never having used a Section 21 eviction, many view it as a crucial safety net.
Landlords also have concerns over the Warm Homes Plan for PRS homes to achieve a minimum Energy Performance Certificate (EPC) rating of C by 2030.
This requirement will necessitate changes for 50% of landlords, with 11% needing to spend more than £10,000 and 34% between £1,000 and £10,000 to comply.
With significant legislative changes looming, many landlords are adopting a cautious approach.
Nearly 62% are not planning to sell in the next year, and the same percentage still see property letting as a worthwhile investment.
However, the next 12 months will be critical as the Renters’ Rights Bill progresses as to whether landlords sell or remain in the PRS, Simply Business says.
