A BBC News report claims that increasing numbers of renters aged over 30 are moving to cheaper areas as rents have risen and and available properties have fallen.
Using figures from the Dataoft property data consultancy, the BBC says almost half of new tenancies taken on by families earning £30,000 to £70,000 in the first six months of this year were for one or two-bed homes.
In the first half of 2020, during the period covered by the first national lockdown, 57 per cent of new tenancies signed by families on £30,000 to £70,000 a year were for homes with at least three bedrooms.
In the same period of 2023, that figure had fallen to less than 51 per cent.
Sandra Jones, managing director of Dataloft, tells the BBC: "We believe these reductions in renters' standard of living to be the direct result of the severe supply constraint that has driven up rents. When affordability is stretched, as it is for so many today, people make trade-offs in order to stay within a budget."
The data also shows renters over 30 years old were more likely to move to a cheaper area than a higher value one when they changed home.
Only a fifth of those from 30 to 39 would move to a higher priced area while more than a quarter would move somewhere cheaper. Among the under 30s, it was the other way around with just under a third moving to a higher rent location in the previous 12 months.
Greg Tsuman, president of ARLA Propertymark, is quoted by the BBC as saying landlords needed more incentives to stay in the sector and raise the number of private rental properties, such as changing the tax system.
"Fundamentally, the problem is that landlords are exiting the market when demand for rental properties continues to rise. Landlords are making a loss when rents are rising, and we need to address the root causes if we're to solve this" he comments.
Dataloft took a sample of between 4,807 and 6,732 new tenancies signed by families with a household income of between £30,000 and £70,000 in each six month period between January 2020 and June 2023.
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Until there is a viable exit route why would anyone become a landlord?
CGT is a major disincentive to enter the industry or for newer landlords to stay too long.
Other countries taper CGT to zero after so many years of ownership. If the UK adopted this method it would encourage people to stay with it long term and provide some much needed stability to tenants.
Section 24 is seriously painful for both landlords and tenants. No other industry is taxed in this way and it is causing real difficulties for millions of tenants. Admitting it was a mistake and returning us to the same tax regime as EVERY other business would be incredibly easy.
The additional SDLT for landlords is counterproductive. It's a big lump of money that has to be found upfront in addition to the deposit and legal fees. It slows down the rate at which landlords can grow their portfolios. In the current climate there are very few owner occupier buyers who can clear mortgage lending criteria. Therefore the demand for rental properties is higher than ever.
Well said Jo Westlake.
Bring back taper relief!
Abolish punitive stamp duty!
And accept that we run businesses and have made sacrifices. Most of us have taken courageous risks to become landlords. We have not all been handed these properties to own and manage in some kind of unfair lottery! We have dedicated our time and energy to build our businesses. It’s our work! Our job!
We need to be treated with more respect. We need to be valued.
Really well put
In the end they won’t be able to move anywhere 🤔 the cupboard will be bare 🆘
Problem is, there aren't that many "cheaper areas". Unless you relocate up North!! Yes you can downsize to a smaller property or a flat. Flats are definitely cheaper locally. I have a tenant who is looking for a cheaper place but smaller places are being advertised for the same rent as the 3 bed house they currently occupy. Hey ho!
Flexibility to move - up when times were good, down when times were hard, used to be seen as one of the great benefits to renting. As opposed to buying a home and risk getting stuck with it, unable to sell if the market drops or you lose your job, get divorced etc which could end in bankruptcy. Forcing home ownership doesn’t suit everyone, that's why stamping out PRS is such political folly.
It is not just moving up or down due to price. Families may need bigger properties when they have teenagers than they do with small children and downsize again when the kids leave home. Older people may move to a flat or a home with a smaller garden when they are less able to look after a bigger place. There are many reasons for people moving up and down the scale, as well as the potential need to change area for work etc.
Exactly as you say, flexibility without having to pay solicitors fees, estate agents etc.
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