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The latest lettings market snapshot by the Royal Institution of Chartered Surveyors contains a raft of worried statements from agents.
A large number of those comments reflect increased worry - by agents and landlords - about possible on the private rental sector to be introduced by the new Labour government.
A typical selection of comments begin with Ainsley Ball of Stonegate Surveyors in Adlington, who says local rents have risen about 5% in the past year but warns: “Landlords are cautious due to concerns about rent controls, section 21 elimination, tenant rights expansions (e.g., pets), and court possession costs.”
This is echoed by Birmingham agent Andrew Oulsnam who comments: “Despite all the promises and threats in the run up to the election, the lettings market retains a fundamental problem, there are not enough properties to let forcing rents to rise due to excessive demand. Landlords continue to leave the market in droves and no political party seems to get it.”
In central London, William Delaney of Coopers of London adds: “Many of our clients feel that they have suffered quite enough. Many are instructing us to sell their properties when they become vacant, rather than risk entering into a new tenancy and face the abolition of section 21, imposition of rent controls, minimum EPC thresholds increasing etc.”
And Upminster agent David Parish sees it this way: “The market is hampered by a lack of new instructions. Landlords are nervous about pending legislation and further restrictions that might be imposed … We are finding that rents are approaching maximum levels of affordability.”
As to the RICS assessment of the national lettings market, there was another pick-up in tenant demand last month, while new landlord instructions slipped further.
The RICS survey always measures sentiment of agents, and today’s edition concludes: “Going forward, a net balance of +38% of respondents anticipate that rental prices will rise over the coming three months. This is very much in keeping with the trend seen since January, with the near-term rental expectations net balance remaining in a tight range of between +38% and +34% over the past six months.”
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Everyone is waking up to that fact that landlords are selling. Too late! 😠
Every challenge is an opportunity. Thats not to say it won't be tough. But people always need homes, so the market will always find a way. I still think S24 is the most damaging impact on the PRS- the raft of changes in the original RRB, whilst large in valume of changes, would have delivered very little real change to the vast majority of the market.
The fear of S21 is bizarre given that around 85% of all tenancies are ended by tenants- so we are looking at just 15% of the market, and we all know it's not that figure that will be worse affected. It will be around 2-3%.
The easiest way to mitigate almost all the risk of S21 going is a quality rent & legal warranty.
Weve had 5 years to get used to the idea of S21 going, this shouldnt be scary any more- although caution is needed.
If landlords can’t evict tenants, the referencing will have to become much stricter, certainly Low income tenants (benefits) will be declined, can’t take the risk. S21 being ‘no fault’ is rubbish, it’s simply the agent or landlord doesn’t want to stay outside the property at 2am taking photos of the parties, or smoking dope inside the property & making a legal case. Simple to just S21 and be done with it, without a court case.
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