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Landlords ”in a position of real power” if they don't quit - claim

A business analyst at a prominent consultancy says landlords who resist the temptation to quit the sector are “in a position of real power.”

Sarah Coles of Hargreaves Lansdown says that although tenants are currently under “horrible pressure” because of rent rises, that situation is only going to intensify as a result of landlords quitting the sector, reducing supply with an inevitable effect on prices.

“Those landlords who are left, are in a position of real power, because the number of people looking to rent continues to rise” says Coles. 

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“Rising house prices mean more people renting later in life, which in turn means tenant numbers are booming. In recent months, they’ve been joined by people who’ve sold up and are being forced to rent because they can’t find anything to buy. With several potential tenants chasing each home, landlords are hiking rents and being pickier about who they accept” she continues.

Coles - commenting on the latest rental survey by the Royal Institution of Chartered Surveyors - says renters are having a tough time. 

“They already spend a significantly larger chunk of their income on housing costs than their home-owning counterparts, and runaway rising bills from energy to petrol and food means they can’t afford to pay more to rent their current home. More and more are being forced to move, which is horrendously expensive in itself.

“Their new homes are likely to be smaller, and there's been a growth in people renting a single room in a larger property to cut costs. Right now, we’re not seeing a boom in sofa surfing and a return to living with parents, but the agents think this isn’t out of the question.”

The RICS snapshot suggests that a net balance of 48 per cent of respondents have seen rent rises, while landlord instructions remain in decline.

At the five year-time horizon, growth in rents is expected to outpace that for capital values. Rents are now anticipated to rise by a little over five per cent per annum through to 2027 while capital appreciation projections stand at four per cent on the same basis. 

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    Coles - says renters are having a tough time.

    “They already spend a significantly larger chunk of their income on housing costs than their home-owning counterparts, and runaway rising bills from energy to petrol and food means they can’t afford to pay more to rent their current home.

    Why does she think renters are having a harder time than millions of homeowners?
    Everyone is facing the same rising bills for food, petrol, utilities, etc. Any homeowner coming to the end of their current mortgage fix is likely to face a big increase in mortgage payments due to rising interest rates. Materials and labour costs to repair and maintain houses have all risen massively but is something a tenant doesn't encounter.

    If a tenant is on a low to moderate income they are often entitled to at least some help towards their rent with UC. Homeowners don't have any corresponding help at the moment.

    If in some cases they are spending a larger chunk of income on housing it is often because they can, not because they have to. The income multiples required for renting and buying are different. For example a couple earning £50K would clear referencing for £1666pcm rent (which in this area would get them a decent 4 bed) or they could get a mortgage for maybe £225000 depending what other financial commitments they had. Assuming they had sufficient savings for a deposit and buying costs that would get them an OK 2 bed or maybe a tired 3 bed. Rent for a corresponding 2 or 3 bed would be between about £900 and £1200pcm and of course includes all maintenance, insurance and other expenses homeowners would have to pay.

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    Getting rid of long term Private Landlords is a huge loss to the economy. The more Landlords that sells up and if bought by an owner occupier, it’s a safe bet the Revenue looses 40% tax take on each such Property per year, also their outrageous licensing schemes now £1300. application fee plus now £50. per habitable room plus the huge financial loss take from Penalties and Court Cases which only ever have one result, plus the Deposit take / the 4 times nonsense, plus the Stamp Duty loss on initial purchase by an owner occupier only a fraction of what of take from buy to rent, plus the millions of £’s for all the other Compliance work Landlords are now required to carry out + 20% vat on all that, plus loss of Estate Agent income their tax & vat, reduced employment for the young people they employ. Have they got a death wish killing the golden goose where then to pull the tax from. Jim write another Book it above me, a lady said yesterday I think went back to education for her A level by I wouldn’t know what that is, it might be a pick axe.

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    I find the headline very depressing, I don’t wish to wield massive power, that is not why I purchased my first property, it was for my retirement, but now I will be one of the “ getting the hell out of Dodge” brigade. It was all so avoidable, all the government had to do (past & present) was to do what they promised…… build loads of truly affordable housing ! And I do not mean these Euro boxes on RedRow (&others) new build estates., they are NOT affordable to those who cannot muster paying their train pass. My children are lucky, they have myself and my wife who will do whatever it takes to help them…… what about the children who don’t have that support? I was that child in the past, and it’s a depressing place to be. This government is complicit in the sell out of a whole generation.

  • George Dawes

    WE're rapidly progressing to a communist state , and what a state it'll be in

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    Yes, Hargreaves Landsdown are note for their financial advice. Who was that super investor that they backed, who went down the pan ?

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    "Noted for their financial advice" sorry spell checker altered..

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