19 Dec 2022
A prominent letting agent has written an open letter to Housing Secretary Michael Gove, calling for a halt on government attacks on landlords and the rental industry.
Theresa Wallace from The Lettings Industry Council and Savills is joined by Ben Beadle from the National Residential Landlords Association; William Reeve from Goodlord; Gary Wright from Flatfair, Heidi Shackell from The Lettings Hub; and Peter Knight from the Property Academy.
Here’s the letter in full:
We, the undersigned, are business leaders within the Private Rented Sector across the UK. With inflation hitting levels not seen since October 1981, we believe that current government policy in the rental sector — covering 35 per cent of UK homes — is stoking housing inflation, the largest single component of the cost of living.
As set out in the recent Renters’ Reform Bill White Paper, current policy objectives include improving the quality of housing and giving tenants greater peace of mind about being evicted. These are worthy objectives which we, and most tenants, support. But tenants – whether professionals or students – also want their housing to be affordable, and current policy appears to ignore this point.
A recent survey of tenants confirms that rising levels of rent are tenants’ biggest single concern, cited by 86 per cent of respondents. By contrast, the condition of rented properties, a priority of the Renters’ Reform Bill, while also a significant concern, is cited by fewer than half as many tenants: 42 per cent.
Government policies to restrict landlords’ legal rights, raise minimum energy efficiency standards to an EPC band C, extend mandatory local licensing, raise taxes on property income and transactions, enhance compliance obligations for HMOs, and increase maintenance costs are putting undue pressure on landlords — most of whom have only one or two rental properties. Already, we see net negative repercussions on rental supply, with many landlords leaving the sector; property portal data shows that supply is down 46 per cent compared with the five year average.
At the same time, tenant demand is at an all time high, with portal traffic up 142 per cent. Many surviving landlords are understandably looking to cover their increased costs via higher rents. Goodlord’s Rental Index saw rents on new tenancies in September hit £1,249 pcm, up 13 per cent on the same period in 2021. Rent increases restrict mobility and supply, with tenants frightened to move house for fear of facing even higher rents in a new home.
By failing to encourage adequate supply, government policy is directly contributing to the sharp increases in rental prices.
Freezing rents in response, as recently introduced in Scotland and proposed by London’s Mayor, would further damage the sector, restricting supply to a greater extent and fuelling landlords’ withdrawal from the sector. We urge the government instead to consider ways to improve supply – while continuing its aspirations to ensure quality homes for tenants – by ensuring the rental sector remains an attractive place to invest without relying on skyrocketing — and ultimately inflationary — rents.
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