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TODAY'S OTHER NEWS

Landlords need stimulus to stick with buy to let, trade chief says

Demand for private rental housing is at an all time high according to new research by the National Residential Landlords Association.

A survey of private landlords across England and Wales, conducted in partnership with research consultancy BVA/BDRC, found that 57 per cent confirmed that demand for homes to rent had increased in the third quarter of 2021 – up from 39 per cent in the second quarter of the year.

At the onset of the first Covid lockdown in the second quarter of 2020 just 14 per cent of landlords reported tenant demand having increased.

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In a sign of recovery in the market, landlords operating in London have seen a significant uptick in demand compared to the levels reported throughout the pandemic as workers returned to the capital.

Some 68 per cent of landlords operating in outer London reported demand having increased, up from 25 per cent in the third quarter of 2020. 

In central London, 54 per cent reported increased demand, up from 16 per cent at the same time last year.

Elsewhere, landlords operating in the South West reported the strongest demand with 79 per cent saying that demand had increased in the third quarter of the year. 

This was followed by 74 per cent in the South East (excluding London), 73 per cent in Wales and 71 per cent in the West Midlands.

 

Despite the booming demand, the same proportion of landlords plan to reduce the number of properties they rent out as plan to increase them at 19 per cent.

NRLA chief executive Ben Beadle says: “As demand picks up following lockdown measures we need a stimulus to support responsible landlords to provide the homes to rent we vitally need. Without this it will ultimately be tenants that suffer as a result of less choice, higher rents and the resulting difficulties they will encounter when looking to become homeowners”.

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    I'm not sure we need stimulus as such but we certainly need clarity, consistency and an end to the constantly moving goal posts.

    We need a fast effective way to evict tenants who breach their tenancy agreements. Anti social behaviour or persistent non payment of rent should entitle landlords to a rapid recovery of their property. As a long term landlord I have never needed to evict a tenant and hope I never will but the recent ban on evictions has been extremely concerning and has prevented me from buying any more rental properties. I would be perfectly happy to compensate a tenant who has fully adhered to their side of the tenancy agreement if I ever had to evict one purely because I decided I wanted to sell the property.

    The EPC situation needs sorting. The lack of consistency in the assessments is a major concern. Just because a property currently has a C rating doesn't mean it still will next time it is assessed. Two of my properties dropped 10 points from one assessment to the next. How is that even possible? Work is being recommended in EPCs that we have no legal right to carry out especially in leasehold, listed or conservation area properties.

    In recent years mortgage rates for portfolio landlords have become much higher than for inexperienced landlords. How is that in any way beneficial for tenants or lenders? A portfolio landlord is more likely to be aware of and comply with housing law and far less likely to suddenly decide being a landlord wasn't quite as easy as they thought and sell up thereby making their tenants homeless. If a landlord has one property and the tenant doesn't pay the lender has a problem. If a portfolio landlord has a tenant who doesn't pay they can usually cover the mortgage on that property from elsewhere in their portfolio. It makes no sense that we are being treated as high risk. Or is it just blatant profiteering by the lenders? The fact it is done on the number of mortgages not the overall level of borrowing or portfolio LTV makes no sense.

    We need a retirement exit route. A great many of us bought 20 years ago when taper relief existed with the intention of selling up when we wanted to retire. BTL was an alternative to a conventional pension without the benefit of tax relief. The abolition of taper relief has left us with a problem. If we sell we pay astronomical amounts of CGT, the remaining money goes into our estate and if we die too soon (before we have spent it or given it away) gets hit with IHT as well. If we don't sell we never get to retire. We have already paid huge amounts of SDLT when we buy, VAT on just about everything and income tax on our profit. As that profit is classed as unearned income we have been prevented from paying it into a pension and enjoying the tax relief people working in just about every other industry receive.
    A return of taper relief on the rate of CGT would probably be the best stimulus the industry could have while also providing long term stability for tenants. It would encourage younger landlords to buy and hold long term and allow older landlords to sell before infirmity or dementia kicks in thus creating huge amounts of SDLT and VAT on all the sales and transaction costs. Obviously we could have bought as a limited company and minimised the CGT issue but how many of us knew 20 years ago how the BTL thing was going to pan out? Most of us struggled to buy our first property, then managed to get a second one and then it snowballed. Every time we come up with a strategy the goal posts get moved.

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    Excellent post!

     
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    Agree with Robert, a great summary. I regularly annoy my MP with an email reminding him of the bonkers policies of this government (that he is a part of). I'd like to plaguerise some of your comments if I may?

     
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    Robert - Thank you for saying so.

    Doug - You're welcome to help yourself to any bits you want.

     
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    Great summary, really well written, covered the points well - the main one for me is the ridiculous debacle with EPCs

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    Our situation very well summarised. If only the govenment would treat us as a business instead of thinking we are all amateurs - It might encourage some of the less professional ones to think more like professionals and behave accordingly. Consistency of all things with a well thought out long term strategy instead of a piecemeal situation dictated by the latest tenant pressure group would encourage us to follow a long term strategy too. Something many of us thought we were following when we first got involved in property!

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    We hear a lot of talk of bad rogue landlords, yes they are out there but not in the numbers the likes of shelter would have us believe

     
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