A lack of choice for private renters about where they can live will undermine plans set out by political parties to reform the rental market.
That’s the warning from the National Residential Landlords Association as the Conservatives, Labour, Liberal Democrats and Greens all propose ending section 21 repossessions.
The association says none of the parties properly address the most pressing and basic problem for tenants - namely the chronic shortage of homes for private rent. According to recent research on average 15 renters are chasing each available property, which has caused rents to rise across the market.
The Royal Institution of Chartered Surveyors has spoken of a “huge mismatch” between supply and demand in the sector, with renters facing “ever-rising living costs and plummeting affordability levels.”
The NRLA insists that without bold measures by the next government the situation is set to worsen for tenants. The NRLA’s concerns come as Savills warns that up to one million new homes for private rent will be needed across England and Wales by 2031 to meet demand.
Uncertainty over regulation of the sector, coupled with the ongoing problem of growing costs, are the key drivers of the supply crisis. This includes tax hikes since 2015 which the Institute for Fiscal Studies notes have stunted growth in the market and led to higher rents.
The NRLA is calling for certainty over the regulation of the rental market. When section 21 repossessions end, it needs to be replaced with a system which makes good on the belief of shadow housing minister Matthew Pennycoock that: “Landlords need robust grounds for possessions in legitimate circumstances, and they need the system to operate quickly when they do.”
Separately, research by Capital Economics suggests that scrapping the three per cent stamp duty levy on the purchase of additional homes would see almost 900,000 new long-term homes to rent made available over the next decade. This would lead to a £10 billion boost to Treasury revenue due to increased income and corporation tax receipts.
The NRLA is calling for the stamp duty levy to be scrapped where landlords bring one of the more than a quarter of a million long term empty homes back into use.
Ben Beadle, chief executive of the NRLA, says: “Renters are being let down by a repeated failure to address the rental housing supply crisis.
“The lack of choice serves only to drive up rents and, given the shortage of alternative accommodation for them to move to, makes it harder for renters to hold rogue and criminal landlords to account.
“We will work with the next government to ensure the replacement for section 21 works for the sector as a whole. However, greater security for renters will mean nothing if they cannot find homes to rent in the first place.”
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Someone remind Bungling Boy Beadle that he is supposed to represent LANDLORDS, not tenants.😡
Just when I think he cannot get worse, he opens his mouth. HE and his friends in Shelter & Generation Rant have exacerbated the shortage of rental properties with their willingness to abolish Section 21. 😠
Exactly! Hence l am no longer an NRLA member. MrB is controlled opposition.
Ben Beadle should be arguing for fixed term tenancies. That would ensure that there would be a greater supply of properties which would benefit tenants. Landlords would have the confidence to let their properties. Rents would stabilise and quite possibly fall.
75% of Private landlords are selling up due to government policies.
The loss of section 24 landlords with a mortgage are unable to make a proof.
The Loss of section 21 and the landlords will loss control of the there own proprieties.
Result is no quality private rental to rent.
Rents have double as a result. !!!
Let us all consider the tenants for now …. No I am being serious 🧐. These poor suckers have no idea how bad it’s about to get 😱😱, a lot of us are cashing 💰 in and running 🏃♂️ for the hills ⛰. They will be like a Rabbit 🐰 in headlights, when the dawning realisation of zero availability of any home hits them.
I also feel sorry for the tenants - most have no idea of the stuff that is being done in their name, they just get lumbered with the rent rises!
I agree it's a great shame for all the good tenants out there. Whenever I try to explain to my tenants what is going on that affects landlords, they can hardly believe it. So firstly it affects them and secondly they have no idea what is coming.
Matthew Pennycoock that: “Landlords need robust grounds for possessions in legitimate circumstances, and they need the system to operate quickly when they do.”
This PennyCROOK guy also wants a hardship test for landlords getting their own property back. Don't trust any of them.
I think Beadles used to work for the TDS. So that says a lot about him. He's here to sabotage landlords.
Several of the anti landlord financial measures could be reversed and that may improve supply a bit.
Abolishing Section 24 may enable some landlords to return to a situation where the property makes a small profit and it would mean rent rises could be more modest in general. How many landlords are currently planning to sell because of over taxation, not because they don't want to be a landlord?
Scrapping the 3% SDLT surcharge would only work if people were convinced the government wasn't about to completely shaft landlords with numerous new and ever more draconian policies.
Doing something with CGT would be the best way to retain existing landlords and entice new ones into the industry. Right now there is an incentive to sell within a few years of buying so the CGT isn't too high. Long term landlords are completely screwed so why become a long-term landlord? Why bother being a landlord at all if you constantly need to be evicting and selling to keep the CGT sensible and then pay the SDLT surcharge to buy a replacement house? Much easier to invest in something else. If taper relief was reintroduced and we used maybe the French model, long term ownership would be encouraged. No CGT payable after 30 years of ownership. It would create more stability for tenants and a clear exit strategy for landlords. Indexation relief would be nice but would probably lead to a massive stampede for the exit whereas taper relief would be more of a trickle.
The biggest problem is lack of confidence and far too much regulation. Instead of enforcing the existing more than ample legislation the government keeps inventing new regulations which pretty much duplicate the existing ones. It just makes it all far too complicated. They should be asking why Local Authorities aren't enforcing existing regulations before inventing yet more for them not to enforce. Could it be that it's easier for Councils not to see the problem properties because if they saw them they may need to close them down and find emergency housing for all the occupants?
Eviction bans and tenant payment holidays were completely half baked ideas that showed the government had no idea who landlords actually are. Most of us are everyday working people who want to provide for our futures. A great many are or were self employed and BTL was supposed to be our pension. We're not fat cat corporations with share holders to take the financial hit.
Ben Beadle is either an idiot or deliberately working against us! I wonder if he ever reads our comments on this website.
Fixed term 3 year leases are the only answer. Unless this happens most landlords will continue to exit the market. Reduction in stamp duty is meaningless if the PRS is no longer a viable business. The PRS is a political football and is completely hamstrung so who in their right mind would invest other than the Corporates who will insist on their own rules.
You could have fixed term three year leases except for students who would need to have a fixed term corresponding to their course length.
Ellie - I agree with your comment re student rentals. I agree with Jo UK should adopt French model for CGT. However with the loss of Section 21 that becomes academic as all landlords will be forced into long term letting unless they go for students and sharers.
How many tenants want to live their lives 3 years at a time?
A new job usually means they're expected to start within weeks. A pregnancy lasts 9 months. Buying a house usually takes around 6 months. Three year tenancies are completely unwanted by a very sizable percentage of PRS tenants.
Even those who are waiting for Social Housing would find 3 year tenancies difficult as they only have a few weeks notice they're getting a Social house.
Or are you suggesting they have certainty for 3 years but can just give one month's notice to move out at any time? How would that work with our 2 or 5 year mortgage fixes?
The current system has worked perfectly well for the vast majority of tenants and landlords for nearly 40 years. Nothing that has been suggested in the last 5 years has been without numerous entirely foreseeable problems.
I think you are right, Jo, but I think we clutch at straws according to the manifestos we have read.
The LibDems suggest that three year tenancies should be the norm. It is unlikely that they will hold any power after July 4th, but I suppose a very remote chance that they could enter into a coalition with the Labour Party if there were a hung Parliament.
There wasn't a problem with the current system because there was already legislation regarding retaliatory evictions. It was a flexible system which accommodated different letting models.
Jo - The only reason I argue the case for 3 year tenancies is that with the abolition of Section 21 we need some sort of alternative. Many landlords are reaching retirement age and shouldn’t be saddled with sitting tenants so they are unable to sell.
I agree with that, too, Margaret. Three years is better than for life.
The LibDems are not as extreme as Labour or the Conservatives, for that matter. You shouldn't have to be ready to sell in order to get your house back. That is quite preposterous.
Jo - I expect a three year tenancy would only work one way, I.e the tenant would have some sort of break clause should they wish to move sooner.
Every bit of new legislation, and I mean every bit, just works against landlords which with therefore only work to increase rents in order to mitigate risks.
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