10 November 2022
Lettings Market Update | November 2022
I’m not sure if you’ve seen or heard some of the TV and radio coverage relating to the lettings industry over the last couple of weeks but there seems to be a continuing onslaught against private sector landlords, from housing charities to politicians, it seems that they are an extremely easy target and I believe it’s got to stop.
As a company, we are working hard to help our landlords, as we are with all of our customers, through what is potentially a really challenging time. Mortgage rates for Buy-to-Lets are ending and the re-mortgage amounts are far in excess, not only of what they are currently paying but what they are actually charging their tenants in rent. The vast majority don’t expect to pass on all of the difference to their tenants, but they are in a no-win situation where they can’t see any way out other than to sell the property and potentially cut their losses.
This doesn’t make them wrong or unreasonable, it’s a stark reality based on underlying conditions within the economy, exacerbated by the circus we’ve experienced over the last couple of months since the so-called mini-budget. Surely, the loss of more rental stock can do nothing but push up rental prices when we are faced with huge numbers of tenants chasing an ever-dwindling amount of homes, so, isn’t it about time the Government eased up on this relentless hounding of landlords and started to think strategically?
It might be counter-intuitive but giving people incentives to buy homes to rent out would ease the supply and demand pressures we are seeing, stabilise rents and in the short term, really help tenants. I believe the alternative is more and more demands for rent control, which will have the exact opposite outcome than the one that’s well-meaningly desired, an increasing amount of landlords will leave the private rented sector as they are simply not willing to “plug the gap” in the supply and need for social housing.
Our average landlord is not a so-called “fat cat” running a large portfolio of properties and earning a great income. It’s what could be termed as “accidental landlords”, people who have effectively fallen into renting a property out, either through marital breakups, inheritance, or at various times, the inability to sell a property, renting has seemed like a really good option and in a huge amount of cases, a retirement plan for the future.
I had a meeting with our Head of Property Management and discussed the fact that a number of our landlords have agreed to reduce rents, where they can, to help long-standing tenants through a difficult time. More than a dozen have volunteered a Christmas rent holiday for their tenants and we’ve even had some landlords offering £250 cashback to tenants over the Christmas break. These are heart-warming stories that easily go unnoticed as they don’t make great press and fit the narrative.
Yes, there are terrible landlords, but they are incredibly rare, the interesting common denominator that I notice is that generally the ones that get the attention, aren’t actually using a Lettings Agent to keep the property safe and legal and look after their tenant. The vast majority of landlords are terrific and it’s about time we got a bit of balance back within the debate.
With house building simply not keeping up with demand, yet more legislation on the way within the rental market, something needs to be done to take the heat out of the sector to help both landlords and importantly tenants and it needs to happen quickly.
Whether you are one of our customers or not, we’d be more than happy to talk to you and help you with advice if you need it in these really challenging times, click here to find out how we can help.
Until next time,
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Jason Bunning
Managing Director of Lettings