Here is our Newsround for this week, there is certainly no shortage of housing news.
Proof – taxes & restrictions make landlords quit the rental market
The clearest indication of the rate at which the private rented market is shrinking is revealed in new research by Propertymark. It shows the number of properties available to rent through letting agents in the month of March halved between 2019 and 2022.
During the same four-year period, 94 per cent of landlords who removed their property from the rental market did so to sell it.
Over half of rental properties sold in March this year alone did not return to the private rented market.
Nathan Emerson, Propertymark’s chief executive, says:
Our research presents a worrying picture for private renters. The number of properties available to rent has been diminishing with a large portion of landlords choosing to sell their properties. A lack of property is the root cause for rent increases and rising figures on social housing lists.
We know from our qualitative research that the most common reasons for landlords to choose to sell their properties and no longer provide homes are around risk, finances and viability”.
He goes on to say:-
Landlords and letting agents have been the subject of extreme legislation changes as the UK Government tries to improve the sector. However, without a middle ground, these changes are actually proving detrimental to those they are supposed to protect. Sadly we do not see this improving as the sector braces itself for more changes within the anticipated Renters’ Reform Bill and upcoming energy efficiency targets.
Propertymark surveyed 443 agents working for businesses with a combined total of over 4,000 branches across all four UK nations.
Safer Renting calls for more training
Safer Renting which deals with tenant relations training, claims that thousands of illegal evictions happen due to many local councils having no trained tenancy relations officers. They claim that in 2020 there were 6930 illegal evictions against only 12 landlords being convicted.
They say there is ‘alarming disparity’ between cases of illegal eviction or harassment and convictions, and figures indicate that only 0.17 per cent of landlords who have committed these offences were convicted.
These are quite startling figures, and you can read more here.
One expert in lettings considers the future of evictions
Paul Shamplina – star of Channel 5’s Evicted! Nightmare Tenants, founder of Landlord Action and chief commercial officer at Hamilton Fraser – has joined leading PropTech expert Neil Cobbold in speaking out on these issues. He says:-
Currently the vast majority of tenancies end because the tenant chooses to leave, not because the landlord is evicting. Landlords want tenants to stay in their property long term, and only serve notice as a last resort” says Shamplina.
The majority of Section 21 notices are issued because a tenant is in rent arrears, or because a landlord wishes to sell or move back into their property. In many cases, landlords could have used Section 8 for rent arrears or anti-social behaviour, but their lack of faith in the associated court process, which is undoubtedly more protracted, is why many always revert to Section 21.
Therefore, abolishing Section 21 will not significantly change the number of evictions, it will simply change the process, which may have knock-on consequences for the number of open court cases and the associated costs for which the tenant will be liable.”
Paul Shamplina argues that the Section 8 notice and associated grounds will become the norm with landlords who previously wrote off arrears and used Section 21 will potentially now seek those arrears via Section 8, to the disadvantage of the tenant. He adds that Section 8 will need considerable revision before Section 21 is abolished. You can read more here.
EPC’s need urgent upgrade
The UK’s scheme for energy assessors says that Energy Performance Certificates (EPC) should focus equally on energy consumption, cost and carbon emissions to make them more relevant.
Elmhurst Energy also states that the validity period should be cut from 10 years to three years and re-issued whenever there is a change to the building, which impacts its energy performance.
EPC’s have not been updated since 2007. The government has published its EPC’s for Buildings Action Plan, which identifies improvements to their efficiency and effectiveness. Elmhurst Energy also suggests other changes that the EPC report should show, you can read more about it here.
No rent controls for England
Housing minister Eddie Hughes has confirmed that the UK government is not considering rent controls in England. He feels that they would discourage investment in the private rented sector and lead to declining property standards. The devolved governments in Scotland and Northern Ireland are seeking their own provisions for rent controls.
Timothy Douglas, head of policy and campaigns at Propertymark, said:-
Only last month we urged the minister to study closely his department’s own statistics that show tenants are 40 times more likely to be made homeless because their landlord has become so disillusioned with the tax and legislative burden and wants to sell their property, than because they can’t afford the rent.
His decision to publicly rule out rent controls in England suggests that he has taken our advice.
The policy of rent controls may be popular among those looking for a short-term solution to rising market rents amid the cost-of-living crisis, but they will not solve the root cause of the problem, which is an undersupply of homes across all tenures.
In a free market, where rents are allowed to flex in line with demand, investment in the private rented sector is incentivised. This provides a far more effective solution to the issue of affordability and encourages the long-term supply of good quality housing.
Landlords welcome delay to Welsh rental reforms
Landlords have welcomed the latest delays to radical rental reforms in Wales, which were due to be implemented next month.
Ben Beadle, chief executive of the National Residential Landlords Association, says:
The NRLA had warned for some time that the Welsh Government’s timetable for implementation of the Renting Homes (Wales) Act was unrealistic and provided insufficient time for landlords to prepare.It is reassuring that landlords’ concerns have been heeded, albeit late in the day. We welcome the announcement that implementation will be postponed until 1 December 2022.
This will give the Government time to consider the many issues raised by private and social landlords ahead of these major changes coming into force.
The act drastically changes the private rental sector in Wales with a six month notice period where a tenant is not at fault, and a 12 month minimum ‘security of tenure’ from the date of a tenant moving in, rules on so-called retaliatory evictions and reforms to the management of joint tenancies.
There will be a strengthened duty on landlords to ensure the property is fit for human habitation, including the installation of smoke alarms and regular electrical safety testing.
I have over recent months received representations from landlords, and particularly social landlords, who have requested that implementation of the Act be delayed.
As such, and in the light of the unprecedented pressures they face, including Covid recovery and supporting those who are fleeing the war in Ukraine, I have decided to postpone implementation of the Act until 1st December 2022. This will allow more time for landlords to complete the necessary preparations ahead of implementation.
Wholesale reform of the type that the Renting Homes (Wales) Act is bringing about happens only very rarely – perhaps once in a generation. I want to do all I can to ensure landlords have adequate time to make the necessary preparations to comply with the requirements of the Act.
And finally, we hope you enjoy our snippets of news for this week.
Newsround will be back next week.