0:02 AM, 8th November 2024, About 5 days ago 11
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The Renters’ Rights Bill will push landlords out of the sector and into short-term holiday lets, warn MPs.
During a Renters’ Rights Bill Committee meeting, some MPs expressed concerns about the bill’s potential impact on the private rented sector.
However, Matthew Pennycook, the Housing Minister, claimed, “there is no evidence of a landlord exodus.”
The Renters’ Rights Bill will immediately ban Section 21 and apply Awaab’s law to the private rented sector.
Gideon Amos, the Liberal Democrat MP for Taunton and Wellington, highlighted evidence suggesting that landlords may switch towards short-term holiday lets in response to the Renters’ Rights Bill.
He said: “Landlord groups such as the National Residential Landlords Association and Dexters letting agency have argued that the Bill risks pushing landlords out of the sector and into short-term holiday lets.
“The NRLA estimates a 1% to 2% drop in rental stock. There is agreement on the topic across the sector, and there is a plausible worry that without any additional controls there will be a leeching of stock into more short-term holiday lets.
“For locations that particularly suffer from that phenomenon, the consequences could be the closure of businesses and services locally.”
However, Mr Pennycook dismissed the idea of landlords leaving the sector claiming “good landlords have nothing to fear”.
He said: “It is important to state that this government value the contribution made by responsible landlords who provide quality homes to their tenants, and believe they must enjoy robust grounds for possession where there is good reason to take their property back.
“As such, good landlords have nothing to fear from our reforms and should be in no rush to change legitimate business models, as I have said repeatedly.
“The private rented sector has doubled in size since the early 2000s. There is no evidence of an exodus since reform was put on the table by the previous government. Our proposals will ensure that landlords have the confidence and support they need to continue to invest and operate in the sector.”
Mr Pennycook’s comments come despite mounting evidence that landlords are leaving the sector.
The Guild of Property Professionals argues that the Renters’ Rights Bill will spark “an exodus,” while the NRLA warns that landlords are now more likely to sell than buy.
Elsewhere during the Committee meeting, co-leader of the Green Party, Carla Denyer, argued the Renters’ Rights Bill must introduce rent controls.
She told the meeting: “I encourage the government and the Committee to look to European countries where rent caps co-exist with large private rented sectors, such as in Germany, where more than half the population rents privately and where they also have in-tenancy rent caps.
“The argument against rent controls is that they will break the private rented sector, but it is already broken, with immediate and severe consequences right now, for all the reasons we heard about in the evidence sessions.
“However, we need to talk about the risks attached to any policy of in-tenancy and between-tenancy rent controls. Any system to introduce them needs to be carefully designed and built.”
Mr Pennycook told Ms Denyer the government that introducing rent controls “could have a detrimental impact on tenants and cause supply issues”.
He added that the Renters’ Rights Bill strikes the right balance, emphasising that “this legislation is just one of several steps we’re taking to address affordability pressures in the private rented sector.”
Rod
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Sign Up19:12 PM, 10th November 2024, About 3 days ago
Reply to the comment left by TheMaluka at 08/11/2024 - 21:47
Hi The Maluka
Thanks for giving iHowz a mention.
https://ihowz.uk/
The team at iHowz have been actively campaigning and lobbying MPs and Lords on the RRB and other PRS issues.
The minister's comment that the PRS doubled is correct, but does not go on to say since S24 was introduced that it has shrunk back from almost 20% to nearer 17% (that's 15% of the private rental market). He was also a little parsimonious regarding good landlords - he should have said something along the lines that "good landlords, with good tenants and local authorities who do not bring in unnecessary licencing have nothing to fear".
It is difficult to understand how raising SDLT ahile freezing LHA rates will encourage PRS landlords to expand their portfolios, especially to house those on low incomes or benefits.
Talk of landlords pivoting their portfolios to furnished holiday and serviced lets may have been relevant a couple of years ago, but RR confirmed Jeremy Hunt's decision to level down by withdrawing the more favourable FHL tax treatment from April 2025. Yes, no more capital allowance, no full finance cost offset, and no BADS CGT relief when you decide to cash in. The final indignity is that their income will no longer qualify for pension relief, despite having become extra hard working landlords.
We have been investing in Britain for years with no recognition, while the risk reward ratio has steady been stacked against us.
We want to be able to to build our portfolios, improve the homes we rent and keep them properly repaired and maintained, but to do this we need to make a reasonable return and know that we can recover our properties in a timely manner when things don't go according to plan.
Instead, we are taxed by central government then subject to spurious licencing regimes buy councils who often are incapable of meeting the same standards (quality and timeliness).
Is it any wonder that even committed landlords wonder if the only vote they have is their fear as they seek a fair return on their time and capital investment?
Why not take a look at what iHowz are doing and join in?
https://ihowz.uk/