Rents rise as landlords exit the market, survey shows

We should stop linking high demand for rental properties to landlords leaving the sector.
Generally, any property that becomes available due to landlords quitting the game will become available to a new landlord or to an owner-occupier.
If it’s a new landlord, there’s no impact on housing supply and the homeowner/tenant ratio is maintained.
If it’s a new homeowner that buys the property, there’s one fewer people looking to rent. There is no impact on housing supply but the homeowner/tenant ratio changes, albeit very slightly.
What we should be linking high rental demand with is uncontrolled immigration. Most new successful asylum seekers will be renters. This is the most likely cause of the short supply. Landlords are unlikely to select these applicants as they would probably not meet affordability requirements. This may also partially explain the surge in R2R as people take rental properties to sublet to those who couldn’t meet affordability requirements set by the principle (home owning) landlord.

No disagreement on asylum seekers adding to demand.
But landlords selling can lead to a reduction in supply.
A landlord can sell a densely populated house to a owner occupier that is just a couple.
Or it could be a second home.
Also displaced money from the property sector to other asset classes can mean not as many new houses would be built

There is not a single cause of why rents are rising there are a few factors at play. Most surveys indicate that landlords are exiting the PRS faster than new landlords are entering it reducing supply. Those that remain are subject to increasing costs, even more so when the Renters Reform Bill becomes law, costs which can only be recovered from tenants by raising rents. Increasing numbers of people due to low wages and the rising cost of living cannot afford to buy so are forced to rent. As demand increases, landlord costs rise and supply reduces rents will rise until many people cannot afford to rent. What will happen then?
Migration is a factor and we need a sensible debate. It’s all very well for well off people from expensive areas where migrants will never be homed to decry the objections of people in deprived area where migrants will be homed as being racist when all they are objecting to is the fact that the meagre resources allocated to them will have to be shared between even more people.

We definitely need a grown-up debate about migration. Shame we don’t have any grown-ups in Westminster.
Of course, landlords are selling up. The median age of a landlord in the U.K. (in 2021) was 58 against a population-wide median age of 39. One in three landlords are aged 65 or over.
Some landlords will wish to ‘retire’ at some point, whether it’s to enjoy their later life or through ill health. Others will die or become otherwise incapacitated.
With house prices high, interest rates high (or at least, higher than for the previous 15 years or so), inflation out of control, regulations becoming evermore ridiculous, an unfair and spiteful Tory tax regime and with landlord-bashing seemingly the new National sport, I wouldn’t expect many of the younger generation to want to become landlords. It’s not an attractive prospect.
The whole housing system is a mess. The PRS isn’t fit for purpose. Social housing is insufficient. Home-ownership is stressful, expensive and many homeowners have finances that are finely balanced on a knife-edge.
Those that have never worked in their lives are ENTITLED to be accommodated by the councils.
Something has to give.

Reply to the comment left by Teessider at 26/09/2023 - 10:30
"If it’s a new homeowner that buys the property, there’s one fewer people looking to rent. There is no impact on housing supply"

Of course there is. For many reasons, some of them given above by TheBiggerPicture. Surveys such as the EHS consistently back this up.

The 'houses don't just disappear' is simplistic nonsense propaganda touted by the anti-landlord mob.

Reply to the comment left by Teessider at 26/09/2023 - 14:25
"The PRS isn’t fit for purpose."

Since section 21 the PRS has been a huge success.
If section 21 is scrapped and Governments continues to attack the PRS it will become unfit for purpose.
Be careful what you wish for.

One of the other big factors is that a lot of properties have been moved over to short term rentals through AirBnB and similar. It's difficult to actually get an exact figure but its looking to be in the hundreds of thousands.

We also only need to look at the recent trend of people renting properties to immediately place them onto AirBnB. That is definitely taking away a home for someone to live in.

Reply to the comment left by The Forever Tenant at 26/09/2023 - 17:00
im afraid I disagree. There are many reasons why people move from renting longer terms lets amd move into Air bnb and the fact that the rates have increased of late tells a story in itself. Tax implications, PRS regulations...all probabl play a factor. Not all amout a quick buck it can be about less stress and quality of life and the ability to not rent out when you want to use yourself (or another family member)

Not all ar bnb are suitable for long term lets so best not put them all under the umbrella of ALL taking accommodation away from tenants/the rental market as this simply is not true. Even if all air BNB were all made into long term lets overnight it still wouldn't touch the sides of the quantity ot type of accommodation still needed!

Many are quaint cute cottages, in lovely but remote locations, normally with not a huge offereing of public transport available. Schools maybe miles away, ditto for doctors and dentists etc. People who bought second homes to use themselves picked them as a temporary/holiday base only. They pay the Council tax and pay into the local coffers, but actually take less out as they dont use te services thelocal tax funds. They tend to maintain the upkeep etc.

Not everyone wants to live in the heart of a city blocks of flats. Families willwat a sense of community, other local families, half decent schools, parks etc. Are all air BnB's in such areas? Nope.

All this waffle is about deflection - trying to get the focus shifted from the real problem. There are council houses that are empty that need updating and filling. There are areas where existing empty shops and other premises need to be re-purposed. Utilise what is already out there first and be open to the private market in leading the way if necessary. Attract investment and attract opportuntiy. At present there is a self imposed monotorium on both with apethy a plenty.

Reply to the comment left by Monty Bodkin at 26/09/2023 - 16:14The PRS is not a huge success when interest rates rise and a significant number of landlords seek to evict their tenants so that they can sell up.
It’s not a huge success when the average age of landlords is near 60 and younger generations don’t want to be landlords. There’ll be many more ‘no fault’ evictions even if Section 21 is scrapped.
Cutting CGT allowances and increasing CGT rates are both ways to disincentivise landlords from selling up. At present, CGT isn’t an issue following the death of a landlord. As we die off, so will the PRS.

Reply to the comment left by Teessider at 26/09/2023 - 22:50
The PRS grew rapidly when we had higher interest rates than now.

The PRS has been a huge success for landlords and the vast majority of tenants since the introduction of section 21.

Any future failure of the PRS will be due to anti landlord Government and supposed tenant help groups.