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TODAY'S OTHER NEWS

Major ‘blow for tenants’ as rents rise

The number of tenants experiencing rent increases in January rose for the first time since September 2018, according to ARLA Propertymark’s latest PRS report.

Some 26% of letting agents witnessed landlords increase rents last month, up from 18% in December, ARLA Propertymark found.

This is the highest figure recorded since September, when 31% of tenants were experiencing rises.

Year-on-year, this figure is up 7%.

The data also shows that supply of rental stock is increasing, with the number of properties available having risen from 193 in December to 197 last month.

Demand from prospective tenants has also increased in January, with the number of house-hunters registered per branch rising to 73, up from 50 in December.

David Cox, ARLA Propertymark Chief Executive, said: “This month’s results are another huge blow for tenants. With demand increasing by 46% from December, and rents starting to rise in response to all of the cost increases landlords have experienced over the last few years, tenants are in for a rough ride.

“Last month, there were three landlords selling their buy to let properties per branch, and as landlords continue to exit the market, rent prices will only continue to rise.

“With the Tenant Fees Act passing its final hurdle in the House of Commons and receiving Royal Assent this month, tenants will continue bearing the brunt, as agents and landlords start preparing for a post-tenant fees world.”

Poll: With rents starting to rise in response to all of the cost increases landlords have experienced over the last few years, do you agree that tenants are in for a rough ride?

PLACE YOUR VOTE BELOW

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    Why are you surprised?
    Have you not noticed the 2015 taxation on turnover from George Osbourne?
    Have you not noticed the coming legislation on No tenant fees?
    Where do you think all these costs are paid from?
    You can blame shelter for these changes.

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    I’m self managing small portfolio landlord and it’s really hitting me hard as I’m in a licence area as well, Iuckily I started selling 4 years ago. I currently have a small Victorian property for sale as I can’t improve the energy efficiency enough to rent it! I’m a qualified procurement professional so have cut costs as much as possible to provide my tenants a good service but with the increasingly heavy tax and regulation burden the only option is to sell off what property I’ve got left. It will be the tenants that will suffer as it won’t be long before there will only be corporate landlords left to offer long term rentals who will then price control the market.

     
    G romit

    .....and the rogue Landlords who ignore all the rules and regulations knowing that they will get away with it as the authorities do not enforce them.

     
    G romit

    Is that the same Shelter that doesn't provide a single roof over anyone's head yet manages to pay their Board over £750k in salaries each year?

     
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    Where I am from, should read, 'major blow for landlords as rents fall'?

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    Are we surprised with the rules put in place by this totally incompetent Government who have wittingly put in regulations that have the complete opposite of the original intent and need?

    It is like the Universal Credit system, but on steroids. Worthless and hurting everyone.

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    If they had gone with a fee cap rather than an outright ban, and left deposits alone then it might have been a good plan...

     
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    Are we surprised with the rules put in place by this totally incompetent Government who have wittingly put in regulations that have the complete opposite of the original intent and need?

    It is like the Universal Credit system, but on steroids. Worthless and hurting everyone.

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    Hi Caroline.
    You paint a bleak picture of the market and you are correct in pointing out the problems that are being caused by trying to over regulate.
    Where I am , we have licensing and registration by the Welsh Assembly Government.
    On top of this, we have the Tenant Fees Regulations and a host of other proposals designed to 'push
    us over the brink'.
    It is almost impossible to raise rents here to cover ongoing costs, so I will have to try and make savings elsewhere. However, it will become increasingly difficult to do this, as more and more expenditure is needed to keep up with the new laws, that are coming thick and fast.

    G romit

    The Government is biased against good private Landlords in favour of their corporate Landlord buddies (aka Tory donors) and rogue Landlords (who ignore all the rules and regulations that are not enforced anyway).

     
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    wag does not exist--it is merely an assembly

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    G romit
    It is almost impossible to police rogue landlords , as they often rent to tenants that would not meet the criteria for legitimate private landlords. As a result of this, they are unlikely to shop them for fear of getting evicted themselves.
    Unfortunately, licensing and registration hit only the 'good' landlords, who run their businesses lawfully and declare their income to the taxman.
    These licensing authorities (as far as I am aware) are not pro-active in hunting down the rogue landlords, leaving it up to members of the public or tenants to report them.
    For the reasons stated, this is as much use as a chocolate teapot.

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    Push business overheads up and it will be the end user that pays in the end.

  • Paul Barrett

    It would seem the logical outcome of the attacks on the PRS is for LL to reduce their leverage by selling properties to potentially just leaving one rental property.
    Hopefully unencumbered.
    It is a lot easier to be a LL when there is no mortgage to pay or a very small one.
    Shrewd LL will years ago have realised the full import of S24 and the EPC regulations.
    They should ideally now be fully prepared for S24 and EPC C status.
    Not just E ststus.
    C status is required in 9 years time so all works required to achieve such should be done now.
    If uneconomic to do so then as others have mentioned the property is now a dud and should be sold ASAP.
    It should have been sold about 5 yesrs ago when it was obvious what the EPC effects would be.
    Belatedly many LL are waking up to the fact that many of their properties are duds.
    This realisation along with S24 should be the catalyst for LL to start dumping these dud properties.
    Let the FTB have these lemons.
    They will be too stupid to realise what they are buying.
    But it will make LL look good selling off stock.
    Indeed LL could start crowing about how many properties they have sold to FTB!!!
    There will be little realisation that LL are selling dud properties that are no longer economic to let now and in the future.
    LL should take the opportunity to build further resilience into their investments.
    I intend to sell 4 flats and invest in 0NE 4 bed house.
    This will become a non-licensable HMO where the net income will be the same as 4 flats.
    The mortgage will hopefully be very small or non-existent.
    By selling up I will be making about 11 tenants homeless.
    Do I care??
    Not a bit!!
    It is not my fault I am being forced to sell.
    S24 has done that.
    So tenants should blame the Govt for making them homeless not the LL.
    With reducing stock levels and seemingly ever increasing rental demand the outlook for tenants is gloomy to say the least.
    They should expect to pay a lot more in rent.
    If LL cannot achieve the rent levels needed then they might as well sell up rather than continuing with a loss making business.
    CG can no longer be worth hanging on for.
    Prices will be in the doldrums for at least the next 10 years.
    LL need to start rationalising their business to be fully resilient to all the further attacks that will be coming.
    S24 will be extended so that no tax relief will be allowed for any LL corporate or otherwise except of course for the big boys who are Tory Party donors.
    Meanshile the Irish Govt is now set on rebuilding their PRS after the failed experiment with their S24 version.
    It took about 3 years for the Irish Govt to destroy their PRS.
    Now they are having to offer incentives in an attempt to encourage LL to return; Oh! and in the meantime during this incompetent experiment rents have increased by 50%.
    Chances of rents reducing by 50% once the Irish Govt has undone all its mistakes!?..............Precisely ZERO!!!!
    All Govt does by its bonkers anti-PRS policies is cause rents to increase; supply to reduce and tax take to reduce.
    Then there are the homeless tenants who cost billions to house in TA etc.
    Had neither Govt introduced these bonkers policies then the PRS would still be bumbling along perfectly happily.
    Yes rents would increase every year but not by much.
    Now LL have no alternative than to increase rents or sell up where not achievable.
    The effects of which ultimately mean rents will continue to increase.
    There is more than enough scope for tenants to pay more.
    Rents should be at such a level that tenants should have no disposable income for things like holidays and smashed avocado on toast!!
    If they have then more rent can be sqeezed out of them.
    It will be because tenants will blink first.
    They will have little alternative than to pay the increased rents.
    Time to sell up or get those S13 out!!

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    Can’t see s24 being put on LTDs that’s the whole reason in my opinion it was brought in to push portfolios into LTD company structures and rid the market of so called amateur landlords with one or two properties. They knew that the larger full time landlords would be able to re structure their businesses.

    Paul Barrett

    I get what you are stating.
    I am just doubtful about the alkeged Govt intention.
    Their issue is just LL.
    Having the same number of LL as now but incorporated DOESN'T achieve anything for the Govt.
    Indeed they lose out on tax take substantially.
    So if all of the 25% of the PRS who are currently mortgaged sole traders converted to corporate status Govt would not have removed any LL from the sector at all.
    Govt wants LL to sell off properties.
    S24 is the main way of forcing such LL to do this.
    But inevitably as LL sell up they will be replaced by corporate LL.
    Only by imposing a S24 version on small corporate LL can Govt hope to reduce LL numbers.
    Of course in forcing the mortgaged sole trader LL out of business there will be a short-term CGT and SDLT windfall for Govt.
    But if LL do manage to increase rents including a RTI increase that will defeat S24.
    Whether this will be realistically achievable is yet to be seen.
    But in Ireland rents increased by 50% mostly to cover their S24 version.
    I think if LL say to tenants well the rent is increasing by £75pm for the next 4 years to cover S24 and a normal RTI and if you don't pay it I will sell up many tenants will prefer to pay the increase rather than try and source another rental property with a LL who could potentially have exactly the same dilemma.
    For the sake of what would be about another £300pm rent over the next 3 years many tenants would pay that if they knew by doing so the LL wasn't going to be forced to sell up.
    If you split in the 4th year a £300pm rent increase over 365 days that is £9.86 per day.
    You can't park a car for that!!
    Split that between 2 tenants and that reduces to £4.43 per day.
    Cut out the expensive coffee and mobile phones and the increased rent is affordable.
    Yep tenants will resent the rent increase.
    They won't have much choice other than to pay what is in effect a Tenant Tax.
    Only 2 tenants of mine have ever vacated due to their refusal to pay increased rents in over 10 years!!!
    Tenants won't mind too much having to pay an extra £4.43 per day.
    Even less if there are more than 2 tenants!!!
    LL just need to stand their ground and inform tenants that S24 has introduced a new paradigm to the rental market.
    So either pay up or get out.
    Most tenants will realise that lots of other LL will be in a similar position and choose to stay with the devil they know rather than choosing a new one to which they would probably need to pay increased rents to anyway.
    We shall see what happens!!

     
  • Daniel Latto

    well weve been telling people for the last year or so - section 24 hasnt even taken hold properly yet.

    Tsunami of homelessness on its way for those at the bottom end :(

    In the past I kept rents low, but more recently have had to increase them due to rise in costs.

  • Paul Barrett

    You have been a lone voice among a few other lone voices.
    The vast majority of S24 LL are only now becoming aware of what S24 is as they note they are having to pay more tax for no increase in income.

    That should get them scratching their heads as to what is going on!!
    The dawning realisation as to what is due to occur in coming years could well force many such LL to sell up.
    This will actually be very good news for those LL able to remain in the market.
    This as those remaining should be able to increase rents as supply is sold off and naturally reduces.

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