The latest rent rise figure produced by the government has triggered an angry response from one of Britain’s top agents.
Greg Tsuman, current president of ARLA Propertymark and the director of lettings at the Martyn Gerrard agency, has made his comments following government figures showing an average 5.7 per cent rent rise over the past year across Britain, and with London having the highest increase since 2006 at 6.2 per cent annually.
Tsuman says: “We suspect this trend to continue as a clear consequence of three key factors: rising interest rates, lack of supply and Section 24 of the Finance Act. Together, they are creating an explosion in rent inflation, which unfortunately is set to get worse.
“George Osborne’s policy with the Finance Act was intended to protect tenants and enable to them to save for a deposit for their own home. Instead, it has harmed the very people it was meant to protect. No tenant today would say it is easier to save for a deposit now than it was in 2016. Home ownership is further away than ever for tenants. Instead, many are finding that their rental prospects are now in jeopardy as well.
“As a result of the full rollout of Section 24 in 2021, landlords must pay taxes on their turnover rather than just their profits, meaning they’re being taxed on their costs including interest payments, which are spiralling. This additional burden couldn’t have come at a worse time, and it has created a perfect storm that is driving landlords out of the private rental sector.”
Tsuman says the reality of all this is that some landlords are seeing their monthly payments increasing threefold.
“Ultimately, this is creating misery for tenants, with many unable to pay the higher rents that will be passed onto them as landlords cover costs. Other landlords who are unable or unwilling to pass on these rent increases are simply selling up and exiting the market altogether, reducing an already insufficient supply of rental properties.
“Lack of supply has been weighing heavily on the market with affordable two-bedroom properties attracting as many as 80 enquiries from desperate tenants. The situation is pushing renters to move to more affordable areas, creating a ripple effect on prices as people leave urban centres for the suburbs. Trends in the city are reverberating outwards.
“As renters are forced to move and sign new leases, this creates another factor contributing to rental increases. This is because these statistics also include renewals, which are lower than new rentals. Essentially, renewals are contaminating these statistics, masking the true extent of the increase in market rents. As more tenancies are coming to an end from landlords being forced to sell, the jump in rents that these tenants are facing is significantly higher than these figures capture.”
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Clearly government policy to stamp out the scourge of greedy private landlords is finally working as intended.
And thus also stamping out the opportunity for homes for needy tenants.
Very true, but they appear to have forgotten the tenants 😂😂
Not just greedy private landlords but all private landlords, good luck finding homes
Ah yes, another caring sharing socialist demonstrating just how much he cares about mass evictions and rocketing rents. Let me guess - you’re the first one yelling for rent caps and bans on evictions, without ever having the slightest wherewithal to question why they are happening in the first place. Keep your campaigning going! You can then complain there isn’t anywhere to rent! (All without the slightest hint of irony or self-awareness!).
19th October 2023, Unfortunately it’s not Breaking News we are living it every day for years.
They failed to mention the Elephant in the Room Mr
Michael Gove THE RENTERS REFORM BILL which includes Removal of Section 21 the very Foundation of All Private Lettings before which there
wasn’t any and the Child Premier’s not even born, do you not get that and we are going back there again Blindfolded and you omitted it.
Better to put it at top of the Agenda before Monday’s Second Reading.
As for rest of the Article, its best answered in Jo Westlake response perfectly about Rent increases and what else caused them. 45 years a landlord and so sorry ever was, what a waste of a life, all the efforts, sacrifices, hundreds of thousands in taxes and self denial to be targeted and criminalised.
Michael - it's not a wasted life. You should feel incredibly proud of what you have achieved. You have enabled hundreds of people to live and work in London. I'm sure the vast majority of them will have fond memories of the time spent living in the homes you provided.
It is tough right now with all the anti landlord policies but we just need to keep in mind how many people we have housed when they needed us.
Both Section 24 and the Renters Reform Bill were designed to encourage owner occupation and reduce the number of landlords. That seems to have been Government policy.
They also want to use the private rental sector properties for social housing for people i.e. for people who will never buy anything themselves and therefore need security of tenure.
The current landlords and tenants are simply collateral damage.
I'd add to what Jo said: Michael has not only housed a huge number of people at a very reasonable price, but also has tried to stop the disastrous legislation which is causing so much harm to everyone so absolutely not a wasted life - a very useful life spent building things and people up. Others will look back and will only be able to see what they have destroyed.
Well said Ellie. I agree they are targeting would-be owner-occuppier votes and looking like they are helping / appealing to tenants. Getting more left-wing votes too. We are as you say all collateral damage. Later on they can claim to be helping tenants. It may well be Labour's mess to clear up (although they will probably go on strike themselves once they bring their new worker's rights in). Labour will probably build on the RRB anyway so why not implement some of it now and take the 'credit'? Unfortunately the Tories announced the end of S21 and have put it in their manifesto. It's difficult not to honour it.
That's true Nick, but, even with their manifesto commitment, they didn't need to outlaw all fixed term tenancies.
The RRB went much too far to be acceptable to landlords.
Manifesto commitment? That was under Boris, they have changed PMs twice since then and when has Rishi made a promise and kept it?
It was in their 2019 Manifesto.
James Brokenshire I believe visited social housing. Heard a load of horror stories and announced the end of S21. Teresa spoke about it in her time as PM.
Sadly, we have now sold 5. 2 left - and their future is in doubt.
Of course by the time cgt and the remainder of the mortgages (about 30% of the value) is paid off, it doesn't leave a huge amount. These were to be a pension and to provide good quality long term accommodation. Aah well.
It’s all been said before, we’re doomed with the Conservative Government pandering to the left to catch votes.
But wait till Starmer and the evil red head are in power, it’s going to get much worse.
Totally agree, I see an increase in CGT, and an evictions and rent ban 😨🆘😳 this is only getting worse.
Instead of keep voting for cons or liebour vote REFORM PARTY UK
Peter, we need a national campaign to get everyone behind that at once. Otherwise we will split the Tory vote and let Labour in.
Sadly people will keep repeating the same old system of voting Labour or Tory and expecting a different outcome. If you want change, change your vote and, as Peter says, VOTE REFORM PARTY UK.
I have formed Tenants contacting me pleading for some where to stay on any basis whether long, short or weekly or in the end a few days.
Sorry can’t oblige its out of my hands I am not allowed to Rent the way you or I want, you’ll have to get some where you can stay forever against the landlords wishes.
So my 4 double bedroom HMO Licensed House in Harrow remains Vacant, Congrats.
Increased business costs are always passed onto the end user
"All said before" there lies the problem. Complete disharmonious and uncoordinated messaging across the private rental sector.
NLRA refusing to robustly challenge Michael Gove. Letting Agents reluctant to speak out and Landlords just walking away.
It's a complete mess.
Surely it can't be that difficult to coordinate a response from PRS?
As a long term tenant moves out, I sell the house, it's that simple. If I can't evict you, why would you bother paying me rent?
Same here.
It used to be sell one a year for CGT Allowance
Now that’s all on the way out I will never rent a property again once it becomes vacant it will simply be sold off
Had 11 properties now down to four, non of which have gone to Landlords. So that’s another 7 properties off the rental market.
Big Big problems heading down the road for Government and Councils when families without homes come knocking.
''Top agent'' LOL
It is out of our hands. Most, if not all Landlord's whom hold a mortgage with more than 50% loan to value will end up selling. Rates will drop but not much, in my view, and with Section 24, maintenance etc it is simply not viable.
Depending how the new RRB works it will then be a decision for mortgage free Landlord's if they wish to remain. My concern here is that the judicial system is broken and no amount of promises will change this. The tenants will feel very empowered and will have nothing to lose now in challenging their Landlord's.
There will be very few new Landlord's investing, so at sometime in the future, whichever colour Government are in power, it will change back.
If I ever needed an example of how Britain has become broken I can now just look at how this Government and Labour howling in the background have wrecked the PRS. It does not take much imagination to see how this must work in other area's, Judicial System, NHS, HMPPS and the list goes on....all success stories....not.
Good luck with that
Death to the private landlords was their plan. Coffin now closing!
All very true, but only what we’ve been saying for years. I’m now evicting 20 families, and not re-letting my 5 bed HMO, as a direct response to Section 24. Well done govt!
It's time greedy and rouge landlords we're sorted out. They play the victims and blame the tenants and they deserve all they get. I know from personal experience and I'm not finished with two rouges that I once rented from.
Had a day off yesterday or was it sign on day.? You really need to read the room, Sandra. You are the type of tenant we avoid like the plague. I’d love to hear from your previous landlords. Oh, by the way it is rogue, rouge is a colour.
I think you'll find it's tenants who a remainly rogue. Some with little or nothing to lose with their behaviour. Landlords tend to be educated hard working people who have gained enough money to invest and not they DSS type who can't work won't work and it's all everyone elses' fault.
Probably right Nick, but I have just let a flat on a short term basis to a German and he is the most polite, most helpful person I have ever met in my life. He is so nice to me.
Germans have manners and good standards I find.
Trouble is, this is getting rid of the good landlords, the rogue landlords don't follow the rules anyway.
@John Young - history shows that once you create a void using the power of the state, criminals will ALWAYS step in to fill that void. America tried it with Prohibition through the 1920's - the main beneficiaries were the crime gangs (Al Capone and Co) who became fabulously wealthy as a result. Happening throughout the UK as decent landlords bail out. The government's cronies in BTR aren't stepping up to the mark (funny that) so desperate would-be tenants have no choice but to engage with the criminals.
So to the S B-R's of this world, you shall reap what you sow. Enjoy your life with the criminals as that's all you'll have going forward ... either that or an overpriced box in the sky supplied by some faceless corporate
Your syntax and spelling is appalling 😂 “ we’re “ translates to “ we are”, that does not fit into the sentence,. I suggest you come back when your ( not you’re 🤔) IQ improves. I will not mention the other spelling error involving a deep red shade of lipstick 💄
Simon, she's a benefit claimant. It's not her fault she can't spell. It's all due to Tory cuts in education and the NHS (she doesn't get all of her medication she needs).
This reminds me of the cartoon of a man on a tree limb, sawing the limb off the tree whilst sitting on the bit that will fall! You may hate us Sandra, but when we’re all gone where will you & your fellow renters live?
@ Tricia, I now have an image of Polly Bleat sawing that branch and I am smiling!
Nick - I was a DSS claimant type for many years in the 1980s and 1990s.
For most of that time I either got turned down for job after job or the Benefit system meant it simply wasn't financially viable to work. It's very easy to develop a hard done by, massive chip on the shoulder attitude.
Getting out of the benefit trap is even harder now than it used to be because of how UC works. Once I managed to escape the benefits world there was no stopping me but it was purely down to the benefit system in 1997 that I managed to escape.
Jo - I know you've mentioned before. It's good you moved on and became a success. But I think you are in the minority of who's willing to do that with how hard you worked with taxis and saving etc. I am sure it is harder to escape the benefit system now. But for some the benefit system is a lifestyle choice. I also think that it's easy for people to develop a chip on their shoulder. But these people get housed for free, fed for free, free schooling and often do not contribute anything and give no thanks for it either. I don't see why others have to listen to the likes of S B-R moaning always seeing everything one-sided.
Nick - I agree. I'm always staggered how much benefit single parents get these days. One of my UC tenants has booked a two week holiday in Disney Florida next year.
Back in the 1990s people used to constantly tell me it was disgusting I could afford to take my kids to Spain for 10 days at Easter. It cost £99 each (pay for 2 and get a child place free) and involved traveling by coach. In order to afford that I didn't smoke, drink, eat red meat, run a car or have a social life. It involved making choices and budgeting.
These days, largely because the LHA is ludicrously low, there are too many alternative handouts (all of which require an active UC claim). It's becoming perfectly normal to apply for DHPs, cheap energy tariffs, social broadband, access to food banks, school uniform grants, school trip funding, etc. All of it requires someone to be a claimant so is it any surprise people aren't willing to give up all those extras?
Listening to the likes of Sandra is useful as it gives a bit of insight into how people who like to think of themselves as downtrodden victims view things.
Playing with a Benefit calculator can show just how well off SOME claimants actually are.
Jo - Times have changed. I don't agree it should be possible for a UC claimant to go to Florida for 2 weeks. What the hell is going on?? My Nigerians have now left. I was surprised she could afford to run a car. She had 4 kids and drove off with the bailiffs letter. First time I knew she had a car. I have several parking tickets she can seem afford to pay. It's all too easy to claim extras. A lady in my road walks totally normally in my opinion but has 2 crutches she plants down without using them for support. Obviously benefits driven. There's no shame anymore.
I do raise my eyebrows with the likes of Sandra. I think she's disabled as she's written about PIP online a few times if you Google her name.
If my memory serves me well it was the Tories messiah Maggie Thatcher that brought in Section 21 back in the 1980s because at that time a property owner needed to be a sandwich short of a picnic to consider letting a house, a flat or even a room for fear of being straddled with a sitting tenant on controlled rent so properties to let especially in London were all but non existent and outlawing of Section 21 in the Renters Reform Bill is akin to taking UK lettings back to the future.
David you are so right I was there Campaigning for Section 21 and lobbying my MP Sir George Young without which it might not have happened in 1988. He knew something had to be done . Where was Polly then she appeared like magic in 2017 having been handed the job £125k by her predecessor Mr. Colin Robb who moved on to greener pastures he was also an attacker of landlords, don’t know if I am allowed to say that.
Anyway according to Google she’s on £122.5k but an extract from 21/22 Accounts says 135k does she not know how much, it should be Public Knowledge.
So that’s £12.500. Difference pa which should mean an extra £5’000. tax for Revenue.
Amazingly she got knighted a CBE no less for attacking Landlords it Certainly wasn’t for Housing the Homeless it must be for making them Homeless.
Sandra Bowes-Rennox you really don't understand how it works. Keep taxing good landlords and heaping more regulation on them means they leave the sector. Higher tax, more costly regulation equals less properties. This coupled with more demand means higher rents. You will only have the rogue landlords left who don't give a hoot about tenant safety and comfort, collect rent in cash and don't declare it. Listen to the landlords on here who are decent people and try and do their best. They have had enough, like me. Thirteen properties down to five - none sold to landlords. The rest will go in the next two years. It's easier to invest my money elsewhere for a better return. A unit trust doesn't ring me at 2am to say the boilers gone off, gets me out of bed to find the gas credit has gone. And then expect me to take them to the 24 hour One Stop Shop for a top up because they can't drive as they have had a drink.
Be careful what you wish for.
People with a vested interest complaining about making money by overcharging for what is a basic human right whilst still being the ones who own the assets has made my morning 😂 this is the bed you all made for yourselves, good luck laying in it.
It's not a human right to have for free James
It is a human right to have food and water, but Tesco won't let you take them without paying.
Tenants are being overcharged? Prove it.
Your beds are in the process of disappearing. Good luck staying in yours.
Landlords provide a service, with the aim to make a profit, like any other business. They are not there to provide a free basic human right. Firstly, you are not forced to rent a property, it is your choice and you agree to the rent being charged. If you don't like the rent, you look elsewhere. If you want 'free' basic human rights accommodation then you need to campaign the government for it, it is not down to private landlords.
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