Rocketing interest rates will scupper the PRS

Landlords will increasingly look to sell up if interest rates continue rising, a round table discussion reveals.

The host Phil Spencer was chatting with Vanessa Warwick a landlord and co-founder of the platform Propertytribes, and Timothy Douglas, the head of policy and campaigns at Propertymark.

The trio discussed the impact on renters if a large number of landlords decide to sell-off their investment property.

And Ms Warwick said that she was considering her future in the sector – especially if interest rates continue going up.

The video is a follow-up on a previous show on the subject which sparked a huge response.

‘Landlords are leaving the private rented sector’

Vanessa said: “It should be no surprise that landlords are leaving the private rented sector.”

She says the main reason is the ‘incredibly challenging environment’ that landlords are facing.

Ms Warwick pointed to rising interest rate rises, the prospect of the Renters Reform Bill and the possibly that section 21 will be abolished.

These are the issues, she said, that have been ‘hammering landlords’ for the past five years or so.

‘Smaller landlords may struggle to keep up’

In addition, portfolio landlords will be working full time and keep up with what is happening in the PRS – and ‘smaller landlords may struggle to keep up’.

Phil highlighted recent figures from Homelet that show there are 2.3m landlords and 97% of them have three properties or less.

Mr Douglas said that the English Housing Survey backs up that figure.

The conversation also covered tenants either being fearful of making a complaint to their landlord – or not understanding they can complain to their local council.

Retaliatory evictions are illegal

Ms Warwick said that while many believe a tenant won’t make a complaint in fear of receiving a section 21, she said that retaliatory evictions are illegal.

She then went onto explain: “The government have created a housing shortage and councils have legal obligations to house people and there is a shortage of homes, so rents go up.”

The debate also discussed the growing trend of councils offering a ‘golden hello’ to attract landlords.

The country needs the PRS

Phil said the country needs the PRS and fears what will happen if the government doesn’t recognise it as a vital provider of homes.

He said the sector ‘needs to be nurtured’.

When rising interest rates were discussed, Ms Warwick said: “Repossessions for landlords are on the increase because the bank rate is jumping up.

“This is having an impact because many landlords kept their (rent) rates low.”

Ms Warwick said that she had kept her rents low for tenants but warned that if rates continue to rise then she too would have to consider her future in the PRS.

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