Why the UK’s housing crisis will deepen as landlords flee

They say there is a housing crisis – and with good reason. Net migration to the UK reached an astonishing 906,000 in the year up to June 2023, far surpassing previous estimates.

Approximately 1.3 million individuals moved to the UK during this period, while 414,000 people left.

According to the Office for National Statistics, net migration for the following 12 months was 728,000.

Even worse, we’ve had 1.9 million join the population in the last three years – but we didn’t build enough homes.

That’s an influx of people without us having adequate housing and infrastructure in place which makes that level of migration simply unsustainable.

If you want a reason for increasing rents, tenant campaign groups, it’s right there in the government data. It’s not ‘greedy landlords’.

Reason for higher rents

Another reason for higher rents is the increasing regulation that must be paid for.

All landlords know this and the notion that we must upgrade rental homes to be a minimum EPC rating of C is also unsustainable.

This missive only affects the PRS but not social landlords or, indeed, any other property owner. Including the government.

Instead, we are expected to shell out vast amounts of money to improve the energy performance with a payback of just a few hundred pounds a year.

Again, that’s a reason to put rents up to pay for the capital cost – so tenants can save a few quid on their bills. But that’s nullified by the rent increase.

Exodus of landlords

All the while, the government continues to deny an exodus of landlords – but it’s hard to ignore that many landlords are indeed leaving the market.

Not only do landlord organisations say this happening, but those independent voices carrying out PRS surveys such as RICS and Rightmove also see what is going on.

Many landlords won’t want the hassle of meeting the EPC 2030 deadline, but the Renters’ Rights Bill is another point of contention.

Although the government’s impact assessment claims it will only cost each landlord £12, experts have debunked these figures as unrealistic.

It’s going to be a lot more – to help push up rents – and yet no one listens.

Landlords exiting the market

With so many new residents moving to the UK and landlords exiting the market, one has to wonder if anyone in government can foresee the consequences.

The vast majority of landlords take pride in providing affordable, safe housing for families and we don’t need selective licensing cons to convince us otherwise.

I keep reading that councils say that conditions will improve – but there’s never any talk of how this will happen.

Councils aren’t interested in finding criminal landlords ignoring the rules only legitimate, law-abiding landlords who fulfil the criteria – and still get bashed.

I’m glad too that Landlord Licensing & Defence flagged up a report earlier this week that councils are barely prosecuting landlords for breaching the rules.

Well, they won’t will they when a civil fine lines the pockets of the council? The lawyers who did the research about councils appear not to have noticed this issue.

But you know, blah blah, bad landlords, blah blah, get away without being punished, blah blah.

Service provided by landlords

If our politicians genuinely cared about housing issues, they would acknowledge the valuable service provided by 99% of landlords and focus on allowing us to thrive while addressing criminal operators.

Instead of persecuting good landlords with taxes and red tape that ultimately raise rents and harm tenants, they should invest in building more homes.

Politicians’ efforts are misplaced and ineffective though I do wonder what the long term aim is.

Many of us feel unfairly labelled as bad actors simply because we sell properties when tenants vacate.

That’s because we aren’t interested in spending money on the EPC nonsense, or signing up to a selective licensing scam and the prospect of not having Section 21 is frightening.

Automatic annual rent increases

So, thanks to our politicians, welcome to a new era of stringent referencing requirements, mandatory home-owning guarantors for tenancies, and automatic annual rent increases starting at maximum prices to avoid bidding wars.

For those with buy to let mortgages dealing with non-paying tenants, it can take a year to 16 months to get an eviction but not get paid the arrears.

Why take that risk? If your borrowings are highly geared, you’ll be snookered with just one non-paying tenant.

But there’s a harsh reality about to unload itself onto the PRS.

For many landlords, the numbers no longer add up, and the stress is overwhelming – there must be loads of landlords struggling with mental health issues out there.

Politicians can do the maths just like us; many are landlords themselves – including at least one ‘rogue’ landlord – but they are actively avoiding addressing these issues.

Inconvenient truths?

When the next set of net migration figures show how many people have moved here and we have a full blown housing crisis because there’s nowhere for people to rent cheaply, what will happen?

I’m betting that landlords will be hit really hard for pushing up rents to unaffordable levels – while ignoring the antics of governments over the past 20 years.

The real shame is that people on low incomes who deserve a lovely, warm and well presented house won’t be able to get one.

There won’t be any. None. And when that penny finally drops about the whys and who is to blame, then perhaps things will change.

Until next time,

The Landlord Crusader

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