Private landlords still quitting sector all over country – RICS urgently calls on Government to review Osborne’s reforms

Private landlords are continuing to quit the sector all over the country, while tenancy demand continues to rise.

The RICS said this morning that smaller landlords’ desertion is the most striking feature of the property market.

It said this is now the eighth consecutive quarter that there has been a continued reduction in new rental instructions.

The RICS often sounds merely gloomy in its monthly reports: this morning, it struck a note closer to anger.

The RICS said: “This pattern reflects the shift in the buy-to-let market in the wake of tax changes which are still in the process of being implemented, as smaller scale landlords exit the sector.

“Significantly, the drop in instructions is evident in virtually all parts of the country.”

However, the RICS said that its member agents were continuing to report rising tenant demand.

It said that as a result of this imbalance, rent rises can be expected.

The RICS is forecasting a rise of around 2% over the next year and by 15% by the middle of 2023.

Abdul Choudhury, RICS policy manager, said: “Our survey suggests that recent Government policy and legislation changes have impeded the growth of the Private Rented Sector, which is a vital part of a functioning homes market.

“Withdrawing tax breaks that small landlords relied on, placing an extra 3% on second home Stamp Duty, and failing to stimulate the corporate build to rent market, has understandably impacted supply.

“While the current focus is rightly on using regulation to improve the experience for tenants, the Government must urgently look again at the PRS as a whole, including ways to encourage good landlords.

“Ultimately, the Government must consider the impact of its policies, and if the wish is to move away from the PRS, it must provide a suitable alternative.”

Changes in the tax treatment of private landlords were initiated by former Chancellor George Osborne.

The RICS also reported this morning that the sales market was flat in July, with the number of newly agreed sales almost unchanged for the fourth month running.

It said new instructions were also flat, following two months of “very modest increases”.

As a result, the RICS said, the average inventory on the books of estate agents is likely to remain close to historic lows.

The RICS survey had 304 responses, covering 620 agency branches.

Agents commenting on the lettings market as part of today’s survey repeatedly refer to lack of stock, high demand and increasing rent.

One agent, in Oswestry, said that his firm had no properties to let at the time of the survey.

Others criticised the Government for the tax changes, including what one agent called “crippling levels of Stamp Duty”.

x

Email the story to a friend

10 Comments

  1. Eyereaderturnedposter12

    “Our survey suggests that recent Government policy and legislation changes have impeded the growth of the Private Rented Sector, which is a vital part of a functioning homes market.”

    Not only is it a vital part of a functioning homes market, it is also cornerstone of the British economy as a whole- This Government is doing a sterling job of desconstructing the UK economy.

    Absolutely disgraceful…Good luck to us all if the Tories hand the next election to a Labour Govt.

    Report
  2. Rayb92

    Precisely what government want so cannot see them taking any action, unless generation rent voters asked for it then there would be a instant U turn !

    Report
    1. Eyereaderturnedposter12

      Agreed. However simply on the basis that we are seeing the fulfilment of a deliberate agenda, it doesn’t make it any less of a disgrace, on the contrary- it makes it more so!

      Have a great day Rayb92

      Report
  3. Mark Connelly

    An agenda with no consideration of the consequences.

    On a broader note, I don’t remember having seen a government so hopelessly out of touch with the views, feelings, and wishes of the general public.

    Nanny knows best.

    Report
  4. ChumpExecutive

    Our Group is not seeing a “mass exit” of landlords, yet. I’d also be surprised to see on the next release of ONS data, that the PRS has shrunk. RICS says the volume of “new” instructions has fallen but what do we mean by a new instruction? We measure “first lets” as properties which we have never let before – not necessarily properties which are new to the market. We also measure “relets” which are properties which we have let before, and the tenant has vacated and we are finding the next tenant. In the “boom” days of buy-to-let we were achieving 4 first lets per office per month. This shrunk back to nearer 2 first lets per office per month back in 2014/15 but has been on the rise in 2017 year and 2018 and is now over 3. Either landlords are buying properties and giving them to us, or we are out-competing other agents for our share of the re-let pie. Now, the relet pie is indeed getting smaller, and there is a very simple explanation – lengthening tenancy terms. Back in 2003 my average tenancy lasted 14-months, it’s over 30-months now, and so for the same size of tenanted portfolio you can expect half the number of relets over a fixed time period.

    Report
    1. Shaun77

      One of the reasons we no longer offer a pure Tenant Find service. No future in it.

      Report
  5. Deltic2130

    Very reasonable article that reflects my experience but if I had one gripe it is that that Choudary character referred to them as ‘tax breaks’. FFS!! They have never been a tax ‘break’ where BTL is concerned – it was only ever a tax break as MIRAS on own homes. In BTL it is a legitimate business expense and should be referred to as such. Every time we allow ‘tax break’ to be used in respect of this we fuel the idiots and hatred that already makes our jobs and public opinion of us hard enough!

    Report
    1. Rayb92

      Agree completely .. stupid wording,  we are asking to be taxed on profit like any other U.K. business ..

      Report
  6. The_Maluka

    ” . . .  the Government must urgently look again at the PRS as a whole, including ways to encourage good landlords.”

    This government does not know what a “carrot” is, only “sticks”.  Bigger and bigger fines, some without trial and criminalising landlords for almost everything including administrative errors.  Removing all the tools a landlord could possibly use to collect rent and control antisocial behaviour and them making them responsible for the behaviour of their tenants.  It is only a matter of time before a landlord is jailed for the misdemeanour of his tenant.  Landlords should be thankful that the death penalty has been abolished.

    No one should even comment on the demise of the rental sector, it was planned and is coming to fruition, it is what the government wants.

    Report
  7. Trevor Mealham

    Many landlords are being targeted by mainstream banks to collapse.

    Theres a lot of engineered asset stripping happening and a number of (all party) MPs are trying to stop the banks doing this, whilst some MPs appear to be allowing it to happen.

    On top, some RICS regulated valuers are then going in and undervaluing around 30 to 40% BMV

    Banks don’t lend. They secure and sell (Promissory Note) debt. Are triggering defaults and dragging some victims to hell and back.

    Typical targets are SMEs just south of a £million upto £30/40m

    Ive met around 300 plus victims, many have been small landlords

    Report
X

You must be logged in to report this comment!

Leave a Reply

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.