16 Dec 2021
76% of councils report an increase in landlords selling up
Councils warned today of a growing crisis in the private rented housing sector, with a sharp rise in landlords selling up or converting their properties into Airbnb’s. The District Councils’ Network that represents over 200 councils conducted a snap survey showing 76% of councils have seen an increase in landlords selling up properties.
Shortages are particularly bad in councils areas popular with tourists, with landlords switching their properties to more profitable short term holiday lets.
76% of councils surveyed by the District Councils Network (DCN) said that this had caused a rise in housing waiting lists, causing more people to lose homes, and making it harder to find permanent accommodation for those in need. 48% of these councils said they were now experiencing significant pressure on housing services due to this.
Said one industry commentator,” No s**t Sherlock. Do you think excessive regulation, licencing, punitive fines, penal taxation, with more jn the pipeline might have something to do with it. Chickens are coming home to roost. “
One council in a popular tourist destination in the south-west of England has reported a nearly 80% drop in the number of open market, long term rental accommodation available in their local authority area over the last three years, with many landlords leaving the market or providing short term accommodation for holidaymakers instead.
This news comes at the same time as a report by property agent Zoopla revealed that rents in the private rented sector have reached a thirteen year high, with a 6% increase in the last year. Councils are reporting that this rise is forcing some long term tenants to apply for hardship support from their local authority, with some council areas seeing rents rise to over a third higher than the average salary in their local area.
Councils are warning that the housing benefit many suffering hardship receive will likely not be sufficient in the longer term, as the Government looks set to keep Local Housing Allowance rates, which determines the amount of benefit received, frozen over the next year.
Landlords are leaving the market due to the impact of the pandemic, with tenants unable to afford their rents, landlords requiring to move into a property themselves and a rise in ‘staycations’, leading to a boom in the short term holiday let market.
The District Councils Network, who represent nearly 200 district councils across the country, is calling on the Government to increase investment in council housing and give councils the tools they need to create their own permanent housing for people in their communities in hardship.
District councils stand ready to work with the government to proactively increase the supply and quality of homes for benefit claimants, ensuring those in need can have a permanent roof over their heads in their local communities in the future.
Cllr Sam Chapman-Allen, Chair of the District Councils Network said: “This survey reveals a perfect storm of problems creating a crisis in the private rented sector across the country.
“Now the Government’s Eviction Ban has ended, this is a problem that could get worse, with councils also seeing increase in the numbers of tenants needing housing support due to increased evictions due to rent arrears.
“During the pandemic, district councils and the government worked together to help protect those who are most vulnerable through the Everyone In initiative, the temporary banning of no-fault evictions, and other measures such as furlough and the Universal Credit uplift.
“We need to urgently tackle this issue by permanently lifting housing benefit for tenants in private rented housing and for increase in Government support to invest in a renaissance of council house building to create homes, jobs and growth.”
Landlord Mark T added “ This really does not surprise me and I am quite amazed that the government and councils didn’t see this coming. And this article seems to have missed one of the other major factors.
They are continuing to pile on more and more regulation, higher fines etc and then removing the ability to claim interest as an allowable expense. As one of the southwest larger private landlords with interest payments of over £48K a year, this was the final straw that made me decide enough was enough. How can any valid expense of £48k just be ignored. I still have to pay it!
Yes I could look at all sorts of ways, using companies etc but this does not change the fact that the PRS is on the governments radar as an easy target to get money , be it from tax changes, licensing or whatever comes next.
Over the last five years since the introduction of the S24 rules, I have sold 26 properties so far and have offers on a number of others and will continue for another year or so until they are all gone. This has removed a large number of family homes from the rental market as all were average 2 or 3 bed family homes.
And from talking with other landlords, I am certainly not alone in this thinking. I will no doubt continue in the property arena, buying, renovation and maybe even looking at AirB&B properties.
But like so many, as these councils are now finding out, my days as a landlord are coming to an end!”
Thanks for reading!
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