Welcome to our first Newsround of September.
It feels rather as if news has stopped until we learn who we are going to get as our next Prime Minister and find out what s/he is going to do about the cost of living crisis.
We will find out our new PM on Monday, and hopefully, once she gets back from the Queen, we will learn what is in store for us.
But news can never really stop so here are some items I have spotted for you. Probably the most telling is
The dearth of properties to rent
The tenant’s organisations are up in arms about this. Not only are the numbers of properties available to rent dropping like a stone, they are getting much more expensive. Plus (not surprisingly) there are fewer available now which are bills included.
Think. If you were a landlord in an era when bills were likely to go up massively, and politicians are demanding rent freezes – would you rent on a ‘bills included’ basis?
But many landlords are just getting out. As this article in the Guardian says
… the number of homes to let has drastically shrunk. The trade organisation Propertymark found that availability has halved since 2019, due in large part to a mass exodus of private landlords. An unusually high number have sold up in response to factors including high house prices, legislative reforms to protect tenants and improve conditions (disincentivising rogue operators), and what has been termed “the great re-evaluation”, with many people rethinking their lives after the pandemic. Lucrative holiday lets are also reducing the availability of property for long-term rent.
The result is more people jostling for fewer rooms – even in places where supply has previously satisfied demand.
As I said in my post here, if the government wants the private rented sector to be the principal source of housing for people unable to buy – they are going to have to create an environment where people are willing to be landlords.
Otherwise, landlords will continue to sell up or switch to holiday letting, and the availability of rented accommodation is going to diminish further. For example, Propertymark are predicting a further mass exodus of private landlords if plans to introduce periodic tenancies go ahead.
And if the supply drops, basic economics tells us that the price will rise.
Landlords organisations have been warning the government for years that landlords will not put up forever with increased regulation, increased taxation and increased ‘landlord bashing’. No one believed them. Now we see it.
What are they going to do about it?
What about tax?
One of the big complaints landlords have is the increasingly punitive tax regime, introduced initially by George Osborn when he was chancellor (remember him?).
For example, investors are unable to claim mortgage interest relief which is particularly worrying at a time of rising interest rates and therefore rising mortgage costs.
Landlords can only hope that if Ms Truss is elected leader, she will help landlords but cutting taxes to encourage them to invest more and bring up supply. At least it looks, for the moment, as if she will not be introducing any new landlord taxes.
Action on short term lets
One of the reasons supply is dropping is landlords switching to holiday lets. Where basically, they can get more money for less hassle.
However, this is causing big problems, particularly in holiday hotspots where locals are finding it almost impossible to find somewhere to live.
A new organisation, Action on Short Term Lets has been set up and will be campaigning for councils to be able to block homes being converted to short term holiday rentals. Saying
What is needed is change to legislation requiring owners to seek permission to convert houses to short-term lets, and powers to refuse these conversions according to local need.
Only then will the growing problem of housing loss be addressed
Problems in Wales
Wales is due to get a new legal regime with effect from 1 December 2022, but it looks as if there are big problems at Rent Smart Wales, the “big bureaucratic and unaccountable beast” at the heart of a rental sector reform programme.
For some time now visitors to the Rent Smart Wales website have been greeted by a notice saying that they are unable to provide a telephone service due to ‘staff shortages’.
The National Residential Landlords Association (NRLA), after being contacted by many landlords concerned about this has been very critical, their CEO Ben Beadle saying
This is an appalling move by RSW and shows a staggering disregard for the customers it serves. Many firms, including us, are finding it really difficult to recruit people in the current environment, but they adapt and plan – they don’t shut up shop.
Given a new tenancy regime [in Wales] is coming in December, it does beg the question about RSW’s preparedness at a time landlords and renters most need it. This sorry episode is another reason to reform this big bureaucratic and unaccountable beast and make it answerable to the people it serves.
You can find out more about the changes in Wales in my posts on this blog, and sign up to my Welsh Law Updates. Landlord Law members will find my articles and FAQ on the new regime here.
Decent homes consultation
Finally, the government has launched a consultation on its plans to introduce a ‘decent homes standard’ in the Private Rented Sector. It is asking what the minimum standards for privately rented homes should be.
You will find the consultation here. It will close on 14 October 2022.
Snippets
- People in period properties facing ‘nightmare’ due to rising energy costs
- The smoke and carbon monoxide alarm rules – what you need to know
- PROOF: ‘Our data shows licensing forces up rents’ say campaigning landlords
- Judge disappoints landlord after quashing agent’s fine over missing tenant check
- Expat landlord fails to keep up-to-date and lands £18,000 fine
Newsround will be back next week.