0:02 AM, 27th December 2024, About a month ago 9
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More corporate landlords will enter the private rented sector in 2025, as they are less impacted by new rules and regulations, while buy to let landlords will leave the sector, claims Leaders Romans Group.
According to the lettings and sales agency, the Renters’ Rights Bill will have a huge impact on the private rented sector but less on the Build to Rent (BTR) sector.
With high demand and low stock expected to continue into 2025, Leaders Romans Group claims the Build to Rent sector could help tackle the supply and demand crisis.
Andy Jones, group director of corporate and BTR at Leaders Romans Group (LRG), says new legislation will reshape the landscape of the private rented sector.
He said: “The Renters’ Rights Bill will have a significant impact on the private rented sector, including ending Section 21 ‘no fault’ evictions, replacing fixed-term tenancies with periodic tenancies, limiting rent increases, banning rental bidding, allowing tenants to request permission to keep pets, and ending discrimination against tenants who receive benefits or have children.
“The Bill will also introduce a new ombudsman, create a PRS database, implement a decent homes standard, and apply Awaab’s Law to the sector.
“Its impact on properties under corporate ownership, and specifically Build to Rent (BTR), will be less extreme, however, as many of these practices already exist in the sector.”
Mr Jones adds that 2025 will still see a supply and demand imbalance as corporate landlords look to expand their portfolios.
He said: “As we approach 2025, the lettings industry is entering a phase marked by stabilisation and opportunity. Rental inflation has slowed to an average of 3-4% for new lets, reflecting the effects of affordability constraints and renters’ budgets are beginning to limit how much rents can rise.
“Despite this moderation, high demand persists, especially in regions with limited rental stock, providing considerable opportunity for investment.
“Supply remains constrained, with data showing that around 12% of current property sales are from landlord disposals: again, an opportunity for corporate landlords who are less impacted by regulatory changes – such as the emerging requirements concerning tenancy agreements and energy efficiency.”
Mr Jones says the key to tackling the supply and demand imbalance could lie with the Build to Rent (BTR) sector.
He said: “Against the backdrop of the Renters’ Rights Bill and greater regulation for the PRS, the BTR sector is emerging as a key solution to the PRS’s supply-and-demand crisis.
“Already, institutional investment in BTR developments has skyrocketed, with the British Property Federation reporting a 23% growth in completed BTR units over the past year alone.
“The sector now boasts over 120,000 completed homes, with a pipeline exceeding 273,700. Initially concentrated in London, BTR developments are expanding regionally, reflecting a growing appetite for professionally managed rental housing nationwide. Regional growth in BTR units (31%) has outpaced London (13%), demonstrating the sector’s broader appeal.”
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dismayed landlord
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Sign Up16:54 PM, 27th December 2024, About a month ago
No shote. Another non article. But at least private landlords are not selling up. Therefore with the amount of corporations jumping on the bandwagon of easy money and profiteering then there is no crisis!
What’s all the fuss about.
Conwyn Flavell
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Sign Up8:03 AM, 28th December 2024, About a month ago
Historically councils were the build to rent players. Builders have become developers but are still focused on sell and go. Consequently if councils can not be build to rent providers due to nimby constraints then central government can hand the job to build to rent. This will force builders to revert to building rather than sitting on the land banks waiting for the maximum profit. It will remove the supply constraints and lower house prices for the next generation and balance the rent or buy market. There is sufficient money to support the build to rent market because of the low risk nature of the investment.
Markella Mikkelsen
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Sign Up10:20 AM, 28th December 2024, About a month ago
Presumably corporate landlords will also need to comply with the RRB. Is that right?
I don't understand why corporate landlords will not be impacted in the same way as private landlords, with the exception of S24 taxation.
Can someone explain?
NewYorkie
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Sign Up11:57 AM, 28th December 2024, About a month ago
Reply to the comment left by dismayed landlord at 27/12/2024 - 16:54
'Private landlords are not selling up...' How do you reach that conclusion, when all the evidence says they are?
BTR is targeting a different demographic, which means the traditional BTL sector will continue with its challenges, and will continue to be vilified.
dismayed landlord
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Sign Up13:22 PM, 28th December 2024, About a month ago
Because for every comment posted throughout the media there is a so called government stat saying we are not leaving! That includes shelter and all the tenants so called supporters. They cannot all be wrong surely.
So let’s support the government stand and walk away. Far better to support your elected members - after all the majority of the UK population put them in power! lol.
Out of 19 let’s 4 years ago I have one left rented out and that’s under notice waiting for a court date. Then I sell. I do not want mass exodus until I am clear of them could be another reason for my comments if I was being serious!
After all, I still believe in Santa!
Reluctant Landlord
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Sign Up9:02 AM, 29th December 2024, About a month ago
Reply to the comment left by Markella Mikkelsen at 28/12/2024 - 10:20
I can only assume they mean the corporates wont suffer as much as PRS LL's in terms of the financial losses/court delays to get possession because they work on accommodation in larger volumes?
ie 1 non paying tenant out of a block of 20 flats say is not as financially crippling over if you only had one flat rental.
Unless the corps AST's are somehow going to be outside the Housing Act??? Will B2Rent be classed as exempt in some way?
Yvonne Francis
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Sign Up16:09 PM, 29th December 2024, About a month ago
Reply to the comment left by Markella Mikkelsen at 28/12/2024 - 10:20
I only know about the student house market which will be badly affected in the PRS by the Renters Reform Bill. The PBSA, Purpose Build Student Accommodation (mostly Corporate) have been exempt from the RRB. So there is a very good example of how the Corporate landlords win over the PRS
Grumpy Doug
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Sign Up18:58 PM, 30th December 2024, About 4 weeks ago
Reply to the comment left by Yvonne Francis at 29/12/2024 - 16:09Yvonne, the current reading of the RRB still includes provision for students in private accommodation (HMO only so excludes small flats).
See https://bills.parliament.uk/bills/3764
Do a search on "student"
Yvonne Francis
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Sign Up11:32 AM, 31st December 2024, About 4 weeks ago
Reply to the comment left by Grumpy Doug at 30/12/2024 - 18:58
Hi: Thanks for replying Grumpy Doug. The only provision the RRB makes for students is 4a which allows a landlord with full time students in a HMO to give notice from June to September in order to preserve the academic year. If this is kept in the bill it will help a bit but the uncertainty of not having a fixed term is horrendous. I think the government wants student houses 'off the streets' as I have heard said, and that's what they will get.