A perfect storm is brewing in the lettings market with rents spiralling driven by increasing demand fuelled by workers returning to offices, landlords selling up and a lack of social housing, according to a lettings agency chain.
Dominic Agace, chief executive of Winkworth, says in his company’s latest podcast: “Landlords are selling up. People are rushing back to the cities for work for the first time from working remotely, fuelling demand. People can’t pay beyond what they can afford. I would expect in the coming year that rent rises would slow, albeit still remaining fairly high. It’s a minefield for the government.
“They are wedded to a path to legislate and reform to help renters. It’s admirable to want a higher standard of rental accommodation. Removing tax relief on interest payments does nothing to improve supply and is putting landlords under water.
“The government needs to step away from the sector being a political football and focus on supply and how they can create policies that will improve supply. Standards will improve if there’s competition for tenants and rents will stop going up if there’s more availability. Build to Rent is one solution but it’s just not going to come quickly enough to solve the current challenge.”
On the podcast a West London agent highlights the case of a one bedroom flat on a main road which received multiple offers over the asking rent, with tenants offering to pay a year’s rent upfront to clinch the deal. The agent says: “One and two bedroom apartments are renting out very, very quickly. We had 70 enquiries within hours of one flat being listed. A lot of landlords are exiting the market, as a result of changes in tax and new energy regulations for energy performance certificates.
“More than half the landlords we are currently dealing with are going to have to invest heavily in their properties as a result, putting in new windows, new insulation and new boilers, with the cost of materials having increased substantially.”
An East London agent tells the podcast that he’s seen a rise in buy to let investors as a result of the weak pound.
”Investors are jumping on opportunities in central London because rents are so high. We’ve only lost a few landlords who have sold and we are finding a lot of overseas investors coming on board. With all the tax implications and other compliance issues that landlords need to deal with at the moment, we not going to see a flood of stock on the market, which would bring down rents in the short-term.”
He advises tenants to be proactive to stand a chance of securing the rental home they want.
“We put on a property and overnight we get 120 leads. I would advise a prospective tenant to go to the agents’ office or phone the office direct and not to wait for a response via one of the portals.” His advice for landlords is: “There is a lot of new legislation and landlords need a reputable agent to manage the property fully, not only to get the best rent but to keep a tenant happy to ensure they stay for a long period.”
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Welcome to the future , and it ain't gonna be pretty
Pretty awful maybe
I like the advert in the last sentence.
I would advise anyone not to get an agent. Do it yourself and remain in control.
My agent didn’t do the deposit forms correctly, denied it and reluctantly changed it.
Took banned fees through taking a card payment for a holding deposit and bank transfer for the balance of the remaining first month’s rent. Insisted on refunding back to the card for which they say they have no bank details. Stops me issuing a S21 for my nightmare tenant they happily put in there. Luckily I have the tenant’s bank details and refunded it there.
They rip you off on building charges too. £2,200 for a vinyl floor to a kitchen of a 3 bed semi?
£15k to replace it’s kitchen flat roof, and extractor fan, 2 window handles and paint a ceiling?? Excluding the other bits I got the roof done for £3.5k....
Booking a gas cert. Booked a month before expiry. Nothing happens. I chase 2 weeks before the expiry they say they’ll do it later.
In the end you are phoning and emailing everyday almost shouting down the phone to get a date booked in. I wanted to slam their heads against the wall literally. They say they can force their way in. Great. A tenant in arrears. Locksmith charges and their attendance costs. All overpriced. But don’t worry i can recover it from the tenant! Instead of them doing it when I told
them and being able to negotiate my way in you get stuck with forcing an entry.
Let’s just my agent claims to be all heart but has no heart at all!
Depends on the agent , I use Strutt & Parker and they are excellent
I used winkworths in the past and they most certainly were not...
Agreed. It’s just difficult when you get stuck with a bad agent.
A dystopian nightmare before our eyes and the government either don’t see it or don’t care… i favour the latter.
I see huge swathes of feral inhabitants roaming the land like in the Max Mad films looking for their food and energy🤣.
Force landlords to sell and pick up all that capital gains tax. Very short sighted
Given they introduced the RTB without replacing them, we shouldn’t be too surprised.
Don’t know why the government wants to kill the golden goose which is what letting landlords landlords are except for home owners.
We pay hundreds of millions of £’s in income tax every year increasing every year, Huge sums in double SDLT purchases, Hundreds of millions Capital gains on sales, multi -million pound cream off in licensing fees, huge kick back of income on the back of Compliance and VAT. Huge dead easy money from fines & penalties, Banning Orders, Re- payment Orders, Confiscation Orders the legal profession & Courts loves the soft money.
They didn’t have any of this soft income before The 1988 Act and Section 21.
Then it snowballed from 26 years ago with the introduction of Buy 2 Let. I suppose many of you didn’t know this and thought it was always there but I was a LL with Commercial loans long before that paying a minimum of 8%.
Oh yes at end of it all they will take Billions again in inheritance tax especially on second home owners letting landlords.
What are they getting from owner occupiers none of the above really, single SDLT, no billions income tax every year, no Capital gains on Sales, no tax on rent a room scam widely abused are you blind.
With the Billions Government gets from letting landlords and buy 2 let landlords anyone could run the economy and yet they make a mess of it, hardly any need for London School of Economics, but may well do for Mr Michael Gove who doesn’t know anything about the above and introducing Treasonable Policy’s destroying the Economy and completely against the National interest and he is the Secretary of State for housing, give me a break
I read somewhere that HMRC had the biggest income tax take from the self employed ever at the end of jan, but they still hate us.
I don’t know what rents some are getting its incredible.
I see a normal 1930’s semi with side garage converted billed for Auction 15-3-23 guide price £650k. but it will be more than that, anyway they say it’s let as 4 units with an income of £60k pa.
I have 3 similar house’s close by and apparently they are getting more for this one house than my 3 houses together.
Micheal
Politicians have been anti British for a long time. Ted Heath was very pro German.
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