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A property industry commentator has set out what he calls a plan of action to rejuvenate the buy to let sector.
Jonathan Rolande of the National Association of Property Buyers is urging the government to take urgent actions to stem what he describes as “soaring numbers of landlords quitting the sector … thus causing misery for those looking to find an affordable property to let.”
He says he recognises that government is walking a tightrope on the issue: if it makes buy to let too attractive then investors will flock to it and thus price out homebuyers, yet if it continues to make it difficult then more landlords exit and fewer replace them.
Rolande says: “Effective National Landlord Licensing would be a positive first step. The current system is a mess.
“Some councils have licensing, while others don’t. A national scheme for landlords at a realistic rate would help to further professionalise the system.
“The license itself would need to be displayed somewhere within the let property, and it would need to be renewed annually. It would contain information on rights and whistleblowing.
“They could introduce a flat fee of around £350 a year on the owner (not the number of properties) which could be reduced if they use a managing agent.
“This would generate around £900m a year to police both the sector and many of the woeful Housing Associations and Councils who neglect their legal obligations. Rogue landlords and inefficient landlords would be more open to scrutiny. And public trust would increase.
“The Government must rule out rent capping once and for all. It doesn’t work.
“We also need to offer enhanced tax relief to landlords who improve energy efficiency.
“Rental properties are amongst the worst performers for efficiency, costing more to heat for the very people who can often afford it the least. In short, spend £500 on insulation – get tax relief as if you’d spent £1,000.
“Insecurity when letting is a common complaint currently made by many tenants. Abolishing fixed term tenancies aims to address that. I’d go further. We should encourage long-term lets with built-in reasonable rent increases annually.
“Taper tax relief for landlords with higher rates for short term lets, reducing each year for long-term tenants. This encourages landlords to allow tenants to build a life in their home rather than just having a roof in the short term.
“Finally, can we please just build some council houses? This would make a huge difference and is something that should have happened a long time ago.”
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That all sounds incredibly over complicated.
Discounts and sliding scales!
What on earth makes him think using a managing agent enhances the experience for anyone?
Home buyers have been priced out by the current interest rates. Nothing to do with anything landlords have done. We tend to look for completely different things to the average home buyer. They want to love it, we want location, location, location, decent room sizes, never mind it's kerb appeal or questionable decor.
I'm completely neutral on licensing. It's just another cost to pass on to the tenants. I am licensed as an HMO landlord. It's not really a big deal apart from the cost (which is bundled in with the rent). Tenants have never seemed remotely interested in the subject. Renewing annually would be excessive. Councils struggle to keep up with renewals every 5 years. I don't imagine tenants in self contained properties would want a licence to be prominently displayed. I think quite a few like to give the illusion of being homeowners and wouldn't want to advertise the fact they're not.
Enhanced tax relief for energy efficiency upgrades would be nice.
I can see where he's coming from with the idea of tapering tax according to the length of the tenancy but it would be an administrative nightmare. How would it work in the situation where one of this years students wants to stay and has 3 friends to join him? Is that a one year tenancy or two years. Then next year 2 of them stay to do PhDs and have 2 different friends join them. Messy and wide open to interpretation.
It would be far more beneficial to bring us back in line with every other business and abolish Section 24.
Reinstating taper relief on CGT would make BTL a more attractive investment. Not sure it would beat the stock market or other investments in the current climate though.
Cutting the amount of regulations would also help. How many times have new regulations been invented when there were already perfectly functional ones doing exactly the same thing already in existence?
Until Councils can charge sufficient rent to be able to properly maintain their housing stock is there really any point in them building more? I'd like to see more retirement Council housing dotted around on existing Council estates, so people can downsize but stay within their community. Every Council tenant who downsizes escapes the bedroom tax and frees up a bigger Council house for a family to move into.
It is just Rolande wanting publicity for himself and his organisation. 😠Just what has the National Association of Property Buyers got to do with landlords and tenants? 🤔
Every suggestion he has made will increase rents and why lump the PRS in with social housing? 😱Every case of mould, damp, disrepair etc that has been published by the MSM has been social housing.😡
Great points made in this post.
Jo, a very reasoned and sensible answer which picked up many of the point that popped straight to mind as I was reading. I sometimes wonder why some of these, so called, experts cannot see the obvious.
Also, £350 a year is an extra £25 a month on the rent whick I am sure my tenants would prefer to keep for themselves.
Spot on Jo. We need you to replace bungling Beadle and run a more representative NRLA.
Margaret - I actually applied to be the local NLA rep a few years ago and got turned down. I'm probably too opinionated and working class.
Well that says it all if you got turned down!
Rolande. No not more Red tape the System is a mess because of Red tape we are strangled.
Jo. HMO is a big deal and a very big deal. I suspect you may have a HMO or HMO’s but didn’t have any difficulty and may even have got a discount to apply initially and maybe not even inspected to rope you in.
When you had to re-license 3 & 4 times and endless restrictions and extra requirements to comply with that weren’t there before. Wasting your time costing you tens of thousands preventing you from letting in the mean time. As some Borough’s say you can’t let without a license others say you can if Applied but not all, so it is a big deal now especially their uni graduates over paid inspectors who ignore your Application and just pick whole paragraphs from their database and call that your list of requirements. Also Councils subletting their Administration of the licensing process to Computer giants, they the Council’s are worse than useless themselves but we must be able to do everything and at our own cost and comply.
I have owned 2 of my HMOs since before they had to be licensed, so I'm now on the 4th license for both of them.
When I bought the biggest one it had just had squatters evicted and needed a complete refurb. Back then there were 40% grants available if you did every single thing on the Councils extensive list or I could have just done a standard refurb which would have cost a lot less. Back then it was too small to need a license. Fortunately I did the full monty refurb so when licensing was introduced a few years later that house was already fully up to standard.
My three storey 5 bed got caught up in the requirements change fiasco. It's a student house so although we were given 12 months the works had to be done in August. In the winter we were told what to do (fire doors, self closers, full wired fire alarm system, etc) then in June that year the government relaxed some of the requirements. The Local Authority said they would think about whether they would go with the new version or stick with the original but in the meantime we should carry on with the work as previously specified. They had us over a barrel. We could cancel the tenants for that year and lose 11 months rent, or we could do nothing and risk a big fine or we could spend loads on work that was probably going to be unnecessary. Great choice! So I spent about £20K getting all the work done. In the October (about 3 weeks after the new students had moved in) the Council announced they were adopting the new requirements, so a lot of the work we had had done was unnecessary. Since then the way rooms with sloping ceilings are measured has changed so I have had to widen the dormer in one room. While that house has cost a lot to make compliant it is one of my most profitable houses.
My 2 storey 5 bed became licensable 6 years ago and had its licence renewed last year. It's been inspected a couple of times and I had expected a big list of things the Council wanted doing. They came up with 2 very minor things that cost less than £100 to do.
They send out the renewal pack months in advance and we can get a discount if we're accredited. So far I haven't had any problem renewing but maybe that's because I do it at the earliest opportunity.
I'm sure having the licence on display in the house you have rented for a decade adds a very homely feel!
Licensing schemes are just an excuse to raise money for the councils, its more costly red tap for LL's to comply with, that gets in the way of renting out property at a sensible price to the tenant.
LL's need less regulation, less taxation and the government to stop over complicating what should be a very simple business, which has existed to centuries. Its the excessive regulation and over taxation that is driving LL's out of the market, the LL's that remain have little option but pushing up rents to cover the additional costs of all the Government imposed regulation and taxation.
Just another cost to pass onto my tenants
I’ve started selling my rentals
I’m out
I am getting out though it will take time. I am reinvesting my money and getting good returns with no hassle.
Yes the current safe savings rates are much less hassle and worry than being in the BTL and can mean more income
The only party that ever affiliated with small businesses has stabbed us in the neck, back and spinal cord on a relentless crusade to destroy the independent PRS , in favour of hedge funds, banks and now carpet baggers, in the form of legislation that is ineffective, doesn’t build a single house, cripples upward mobility and rationalises discrimination based not on colour of skin or religion, but occupation.
If I told a Muslim or Jew they could only make a living for 90 days a year, they’d pay tax on phantom profits, they’d face clawback of their income if their customers committed fraud, you’d prevent them from justice if their customers had a mental illness, you’d tax them 3% more as a surcharge for being a Jew or being a different gender, you’d be probably be charged with being a racist government and face some serious sanctions.
Wouldn’t you?
Do you believe that this faux-tory government has any resemblance to the conservative party? That is why many are changing to REFORM.
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