Industry anger as Budget ignores private rental sector

All sides of the industry have expressed anger and frustration that yesterday’s Budget effectively ignored the private rental sector.

ARLA Propertymark’s policy and campaigns manager Timothy Douglas says: “The announcements provide some good news but leaves a lot to be desired.

“A rise in the national living wage is good in principle but with inflation expected to top 4% by the end of the year, higher household bills from the on-going energy crisis, a cost-of-living squeeze, and the cut to Universal Credit, it is unlikely to provide the boost to incomes that’s needed.

"The £65m funding for those in rental debt provides some support but the devil is in the detail. Almost four million low-income households are in arrears with their household bills, yet this money will be targeted at those who are most at risk of homelessness, excluding a significant number of others from help.

“It is further disappointing there is no reform of the court system to deal with the volume of possession hearings – an estimated 62,000 just in England and Wales alone – or proper funding for landlords so that calls for energy-efficiency improvements on an older private-rented stock are financially viable, and not just hot air.”

Polly Neate, chief executive of Shelter, says: “Housing costs are almost every family’s biggest outgoing and their biggest worry – but there was very little in the Chancellor’s budget to lighten that load. 

“With no plan and no new money to build enough truly affordable social homes, thousands of families will remain caught in a relentless struggle to keep a roof over their heads.  

“While lowering the taper rate to allow people in work to keep hold of a bit more Universal Credit is really good, it won’t reach all of the five million families hit by the recent UC cut, and it doesn’t help people unable to work because they are sick, disabled or have young children to look after.  

“The government cannot level up this country if it keeps missing opportunities to sort out the housing crisis. Until it commits to building 90,000 green social homes a year, families are going to continue to face the agonising choice of whether to put food on the table or pay the rent.”

However, London agent Jeremy Leaf - a former head of the residential faculty of the RICS - says there was at least no additional taxation on the private rental sector.

“By not introducing further controls or obligations on landlords, that has made it easier for people to save as it means rents, which are already going up, are less likely to rise further still” says Leaf.

And Richard Davies, head of lettings at Chestertons, says: “The Budget fails to deliver for the lettings market. Many people are in danger of losing their homes as private landlords are forced out of the market in the face of both excessive stamp duty charges and a loss of tax relief. 

“We believe that the government should give as much consideration to supporting the private rental sector as to home ownership. Our lettings agents are finding that supply increasingly fails to meet demand. In London particularly, there is a huge demand for homes to rent and the government has done little to address this.

“We are disappointed that the opportunity to provide more proactive support for the private rented sector was not taken. The sector has expanded from 12 per cent of UK households in 2006 to 20 per cent in 2017 (and from 19 to 29 per cent in London). The shortage of available stock, however, is becoming as much of an issue as it is in the sales market in many locations.”

From the PropTech sector Neil Cobbold, PayProp’s chief sales officer, shares the frustration - although feels being out of the spotlight has benefits. 

“There was no mention of lettings or the private rented sector, which will come as a relief to many landlords and agents who had been expecting changes to property taxation. The cladding crisis affects the sales and lettings market in equal measure, and is tied in with the ongoing leasehold scandal. I think we can all agree that fixing the crisis is a must to avoid another Grenfell-style tragedy, so it’s pleasing to see the government has announced a £5bn fund to remove unsafe cladding from the highest risk residential buildings, which include many in the private rented sector. 

“The Residential Property Developers Tax, designed to fund cladding work, will be on developers with profits over £25m at a rate of four per cent, which should ensure that SME builders and developers aren’t put at risk. There will still be calls for things to go faster and bigger, but it’s a step in the right direction for those affected. 

“The government has set out its stall many times with its levelling up agenda, and as Boris Johnson said in his recent conference speech housing will form a key part of this, so it’s no surprise that Rishi Sunak announced further investment in housing and housing-related activity. This, he said, will total £24 billion, including £11.5 billion towards affordable homes. While such a pledge is welcome, it will only become clearer over time if such promises are kept to and if the government really can level up the country.”