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EPC Chaos, Regulation Fears, Harsh Winter Ahead - agents tell of landlord woe

The latest rentals market snapshot by the Royal Institution of Chartered Surveyors gives the now-familiar story of how demand is far outstripping supply.

The snapshot - which is basically a measure of surveyors’ sentiment - shows a net balance of 36 per cent of surveyors reporting an increase in tenant demand over the past month yet landlord instructions falling for the third month in a row. The result, of course, is rapidly rising rents.

However, perhaps more interesting is an insight into how lettings agents see the current market - and their comments, included in the RICS snapshot - ring alarm bells for the private rental sector.

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Here is a representative sample of their comments:

Bruce Collinson of Leeds agency Adair Paxton says: “Tenant demand has been very strong for 12 months and if as predicted up to 300,000 private landlords exit the market because of proposed changes to law, with nobody else filling the gap, rents might rise sharply. The proposals on EPCs/Band C will cause chaos.”

Gary Thompson of Barnsdales agency in the north of England comments: “There is growing demand for residential lettings which appears to result from low paid workers migrating to jobs where there is affordable accommodation; and due to a reduced stock as landlords exit the lettings market for reasons relating to maintenance costs and onerous lettings procedures.”

John Chappell of Chappell & Co Surveyors in the East Midlands sees it this way: “Landlord clients now actively re-assessing remaining in the market due to ongoing economic situation and the proposed legislation changes to the private rental sector, which by assuming all landlords are the bad guys, could see a marked decline in private sector rental property availability.”

And in the West Midlands, Richard Franklin of Franklin Gallimore states: “Some landlords thinking over the proposed amendments to the sector - although many have sought to sell taking advantage of market conditions. Increase in bad debts prompting service of Notices to Quit - a pre-cursor to a harsh winter.”

Maidenhead agent James Farrance, of the Braxton agency, sums up the situation: “Rents continue to rise driven by lack of available stock in the PRS. We are now seeing the Butterfly effect of the extra second home stamp duty, Tenant Fees Act, reduced expense allowances and threat of AST changes causing landlords to exit the PRS driving up rental levels at record rates.”

In Scotland there are already stricter controls over lettings and rents than exist in the rest of the UK, reflected in the comments of Edinburgh agent John Brown: “As landlords leave, supply is less and rents are moving forward. The [Scottish] Government moving towards rent capping and offering tenant security as available during Covid to tenants with addition of costs to meet Energy standards more smaller landlords will leave the sector.”

And in London, high profile agent Jeremy Leaf - himself a former chair of the residential faculty at RICS - tells the survey: “Aspiring first-time buyers are increasingly taking refuge in private lettings as the cost of living crisis starts to bite but the continuing shortage of especially one bed flats is adding upward pressure to rents - and there’s little sign of change.”

It’s an extraordinary similar message coming from almost every agent in every part of the UK - a supply shortage being worsened by increased regulation and higher taxes imposed on landlords depicted as “the bad guy”. 

You can see the survey for yourself here.

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

  • George Dawes

    It's like it's all been planned ....

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    George
    Yes, of course.GB news is covering all the things the mainstream media isn't !

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    A lot of Ukrainian refugees have turned up in Scotland which can't be housed so Sturgeon is hiring a ship !

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    Hope she's joining them!

    She and her husband have (at least) two houses with loads of spare rooms but perhaps they are already full up with refugees?

     
  • Peter  Roberts

    The government have made a massive rod for its own back.
    Landlords are now becoming totally sick of the constant changes in regulations etc and are leaving the PRS in there droves.
    This week 30% of all properties for sale are said to be by Landlords and the majority of these will no longer come back onto the rental market.
    A massive massive problem is being stored up by the Government and Councils who will have to pick up there own caused issues and lack of properties from the PRS.
    The people who will gain from this shambles is the B&Bs and Budget Hotels that the Government and Councils will be forced to use to house the thousands and thousands of homeless people to keep them from being on the streets.
    Think again Government and Councils before it’s to late.

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    It would be so simple to fix.

    Landlords need certainly, consistency and long term fair tax policies.
    1 - A decision on EPC requirements now, immediately not some distant date in the future. Plus a guarantee that requirement can't be changed for a minimum of 30 years. Also a guarantee that properties can't drop a band due to changes to the EPC algorithm. Once a C always a C or above.
    2 - Standard SDLT on all traditional BTLs and a refund of all the extra 3% SDLT that has been paid on any properties where it can be proved they have only been used for standard AST type letting. These are long term homes for people not some luxury toy.
    3 - Abolish Section 24. Tax us on the same definition of profit as every other industry.
    4 - Cut CGT. Unlike other assets houses can't easily be sold off in optimum size lumps to best utilize annual CGT limits. Either cap CGT on property assets at 10% or bring back Indexation or taper relief. Ideally do the same as France and have zero CGT after 22 years of ownership.
    5 - Sort out the eviction situation. Cases of rent arrears or ASB need to get to court quickly within weeks, not months. Decent tenants who have fully complied with their tenancy agreements need financial compensation towards their moving costs if the landlord needs to evict. A long term landlord would only be in that situation when they eventually want to retire or move into the property themselves so it's a one off expense that can be planned for and may never need to happen.
    6 - The government must guarantee to never, ever again ban evictions and suggest rent payment holidays without giving us a full financial support package.

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    Such common sense Jo - can you stand for PM please?

     
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    10 yr cgt free in Germany. I like to mention that whenever I get some anti-landlord banging on about how much better the German system is. It usually shuts them up!

     
  • Shelley Munn

    It has been planned. The government want to house all renters so they can have control. They want the renters rent to add to the coffers. That's why they are building to rent. It wouldn't surprise me that prs is banned at some point.

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    I think a reconsideration of the decision to scrap Section 21 is the most important factor in encouraging landlords to remain in the private rental sector.

    I remember when tenants had security of tenure in the 1970s and 1980s and the private rental sector was tiny - nobody was prepared to hand their properties over indefinitely to tenants.

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    S21 is big, S24 is big, EPC C is huge!

     
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    In my estimation, S21 loss is huge and EPC C is big. I don't care about Section 24 because I don't have a mortgage or loan - although I appreciate that it is very important to others.

     
  • George Dawes

    My grandfather was a sitting tenant in house and the rent was ridiculously low , something like £12 a week in the 70s and 80s !

    If this all comes back in how on earth will people pay mortgages with peanut rents ?

    Answer is they won't - this is all a long term plan to take everything off everyone - you will own nothing but I doubt very much if you'll be happy

    Tbh if it happens I can see civil war breaking out , I certainly won't be giving up my stuff without a fight

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    We are being properly stitched up. Additional tax and costs if you stay, right to buy when Labour get in, but if you want to sell up you have to do it over a number of years because of the unjust way CGT is levied. And when Labour get in how high will CGT be then. The whole thing is madness with everyone losing. Landlords lose income (often their pension), tenants can't find somewhere to live and government lose income from taxation on rental profits and tax emanating from letting agents.

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    Perfect summary!

     
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    So much to agree with I sold 20 units over the last two years and suffered GCT needed taper relief which was cancelled some years ago to get more tax, if the 22 (France ) ruke was in force would have been a great boost. but the government what our money when we earn it, sell it, or even save it, or die with it. selling two more next year to combat CGT and the rate the prices are going up hopefully will also be an investment.Less CT
    like the idea of the boat in Scotland, can it sail to France at all?.

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    Just 10yr cgt free in Germany

     
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    Well, this is what the government wanted! A strangled sector and massively high rents where no one can move easily and those in need are excluded from ever finding a home. Seems like such a policy might be considered insanely stupid by some, but I presume the govt know what they’re doing… (LOL!)

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    Who knew….. said no-one ever 😂.

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    Private landlords told the government what would happen, but the plebs went ahead anyway. Morons. They never listen and think that they know best. They need to implement some of the following:

    1) Do some actual work and clean the electricity supply before pestering landlord with their EPC s~~t. That will take imbeciles of that nature at least 100 years, so they can forget about net zero.

    2) Related to number 1 - Government need to stop making the landlords out to be the bad guys, go to the media and tell them ''we got it wrong again, we're morons, we need 100 years to get the electric clean at the pace we work because despite our posh accents we have an average IQ hovering around 90. We're basically useless which is why we blamed entrepreneurs such as landlords that try to get off their lazy backsides to do something''

    3) Government should admit scrapping section 24 and issue public apology + repeat statement to public that they are moronic idiots.

    4) Government should admit that scrapping section 21 is doing more damage and do a u turn. Same as number 3, issue public apology + repeat statement to public that they are moronic idiots.

    5) Scrap inheritance tax on rental properties - You want to keep more landlords in the game then lowering capital gains is probably not the way, but IHT is definitely a good motivation to keep assets rather than spend proceeds.

    6) Finally the good old British people need to stand up and tell a few bunch posh-speaking plebs in suits they should stay the hell out of interfering with our private assets bought with our hard earned money. Someone has to remind these idiots that this is supposed to be a free country that is supposed to encourage private enterprise. We are supposed to be led by ''free leaders' so stop behaving like communist losers.

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    Where is the comment about Wales' legislation? This is discrimination.

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    I cannot think of a single Policy the Government, or Councils have implemented, or Are Planning to Implement since 2016. Concerning the Private rental Market, which have benefitted the Normal Rent Paying, reasonably House proud Tenants we rent to.

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