Private rented sector loses 46,000 homes as landlord-bashing tax clampdowns kick in

There were 23.9m dwellings in England at March 31, 2017, the latest official figures show, with a fall in the number of private rented sector homes.

The fall suggests that at least some landlords took flight as tax changes either took effect or were announced. It begs the question as to whether more landlords have quit over the last year.

According to the Ministry of Housing, Communities and Local Government, the total figure of dwellings in the 12 months to the end of March last year was an increase of 217,000 (0.92%) on the same point in 2016.

Of the 223.9m dwellings, 15.1m were owner-occupied, 4.8m were private rented dwellings and 4m were social and affordable rented dwellings.

Between March 2016 and March 2017, the owner-occupied dwelling stock increased by 262,000.

Notably, however, the private rented stock decreased by 46,000.

The social and affordable rented stock increased by 3,000 dwellings but other public sector stock decreased by 1,000 dwellings.

The statistics also show there were 605,891 vacant dwellings in England on October 2, 2017, an increase of 16,125 (2.7%) from 589,766 on a year earlier.

Vacant dwellings are 2.5% of the dwellings stock.

The latest statistics differ from those published in the English Housing Survey which studies households not dwellings.

The trends are consistent.

The number of owner-occupied dwellings increased between 2014 and 2017 after a period of decline.

The proportion of dwellings in owner-occupation increased steadily from the 1980s to 2002 when it reached its peak of 69.5%.

Since then, owner-occupation gradually declined to level out at 62.4% in 2015 and 2016, increasing slightly to 62.9% in 2017.

This is consistent with the latest figures on households in owner-occupation revealed by the English Housing Survey. These show that owner-occupation rates remain unchanged for the fourth year in a row, for the period 2013/14 to 2016/17).

The number of social and affordable rented dwellings was also up.

However, the decrease in private rented sector dwellings between 2016 and 2017 is interesting.

The fall in the number of private rented sector dwelling – now representing 20% of the total stock – came after previous successive year-on-year increases.

In April 2016, a 3% surcharge was introduced on the purchase of additional properties.

That same year, 2016, it was announced that from the following April there would be a four-year phased-in abolition of landlords’ ability to set financing costs against tax.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/710382/Dwelling_Stock_Estimates_2017_England.pdf

x

Email the story to a friend

9 Comments

  1. Mark Connelly

    Give it another couple of years when over 100,000 homes have been lost from the private rented sector. Government ministers looking at each other saying why did no one see this as the obvious consequence.

    But minister, everyone did outside of government. Again

    Report
  2. Peter

    Shock, horror; what a surprise; who would have thought.

    Report
  3. lettingsguru

    Where are these properties going? Are they just flying away for a better life elsewhere?

    Report
    1. Barry20

      According to the English Housing Survey 2/3rds of FTB are not from the PRS (formerly living with parents/relatives/etc). So the net 46,000 fewer properties means that ~30,000 net  increase in demand for rental properties. (and that excludes increased demand from ongoing net immigration, people living longer, people marrying later, divorce break ups, etc).

      Report
  4. Neill30

    Good comment re: ‘lettingsguru’.  The properties are justifiably becoming available for mostly first time buyers. They are not lost from the housing stock, as the article has attempted to imply. The various measures are a correct method to redress the balance of tenures with the housing stock. Perhaps a question should be put to first time buyers, who had rented, and have now been able to buy their first home. Retaining homes in the PRS is not good for the property sector, apart from a minority. Owner occupied homes are morally a better choice, there will more transactions when people sell and move on, occupying agents, legal teams surveyors etc. A small PRS is fine, especially for specific markets such as specific blocks of flats, but not as a large scale provider. That model distorts economics, and denies good homes to families, gives too much insecurity. I rented for several years. And if I compared my experience in the context of as consumer, then I was very disappointed. Too much insecurity, too high fees and rent, and a lack of freedom to make reasonable changes to a home. I say as a consumer, because many landlords do see themselves as businesses providing a service. But, if the level of services and dissatisfaction existed in a private business elsewhere, ten that business would fail. We see that with retail. Too many landlords are trying to sell a consumer model that those consumers do not really want, and then attempting propaganda to justify their positions. I would never want to rent again, and that is like me having had a bad experience with a certain make of car, and then never buying that make again.  The PRS has lost me forever as a potential customer. Private landlords are destroying their own industry.

    Report
    1. singlelayer

      Your thinking is far, far too simplistic. The English Housing Survey states 2/3rds of FTB are not from the PRS (formerly living with parents/relatives/etc). So the net 46,000 fewer properties means that ~30,000 net  increase in demand for rental properties. (and that excludes increase demand from ongoing net immigration, people living longer, people marrying later, divorce break ups, etc).

      Report
    2. Will

      Neill30 has, in my view, put forward some interesting points of view but the matter is not quite a clear as everyone assumes.  There is no reference as to which housing stock has changed from the PRS. There is no indication if it is first time buyer fodder or HMO’s that have gone to market. There is little doubt the loss of stock is most likely to impact on the poorest in society.  I don’t think the article implied there was any loss of stock merely that there were estimated to be 46,000 fewer homes available to rent plus the 1,000 loss from the public sector. I am not sure I would agree about more work for agents  surveyors and legal teams as the same people often deal with the rental aspects. Whilst comparison is made between various markets and in particular the suggestion of making reasonable changes to rental property; one could make the comparison with a lease hire car, you would not be allowed to “tune it up” or make alterations, change wheels, change in car entertainment etc to suit your personal requirements. Perhaps the expectations of Landlords and Tenants are different at times. What the PRS has provided is mobility of labour; this has provided enormous financial benefits to industry and commerce as a whole.  The PRS has clearly not been destroying itself; if it has then Government would not have to found it desirable to intervene. It is sometime difficult to try and see the picture from both sides.

      Report
  5. jb12373

    We we’ve lost many rentals from private landlords selling up and NONE have been bought by first time buyers?; they can’t afford them; end of.

    Ours get bought by people with cash, who couldn’t care about the mortgage tax either because they have never had one. The reality is that even paying 3% extra stamp tax on 500,000 that returns you 5% in a house, still makes a better return than a bank in it’s first year and improves in subsequent years.  All these tax changes and fee bans just hurt the “striving middle classes” who own perhaps one extra house as pension but with a mortgage on. This prevents them from becoming rich; once you escape that, it makes no difference….like most of the MPs I should add! funny that.

    Report
  6. IWONDER36

    while the majority may aspire to home ownership, there is still a large percentage of the population who have no such aspiration, or won’t ever be able to due to low pay and high property costs. Not to mention the work-shy who prefer a leisurely life on benefits with everything including the kitchen sink paid for them.

    Private Landlords have filled a huge property void where demand for good homes exceeds supply, and while just about breaking even, certainly for the first 7 to 10 years.

    Of course some are dumping their second property in a blind panic, but portfolio landlords tend to be a bit more canny than that. They will shop around for an agent who offers a good deal, they will absorb some extra costs for great service, and they will see an increase in rent and yield.

    The commission based agent will benefit from the increased rents, as will the government from tax revenue.

    There will be a happy ending and everybody will live happily ever after, unfortunately, not so happy for the poor out of pocket tenants, unless they can increase their universal credit claim?

     

    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.