A leading figure in the property world has pinned the blame for the UK’s rocketing rents on the Government, claiming that it’s absurd to accuse landlords and letting agents of profiteering from huge demand.
Adam Walker (pictured), who has worked in the estate agency sector for over 40 years, says in his The Negotiator column that as well as too little house building in recent decades, other keys reasons for rising rents are the brief Liz Truss premiership during landlords on variable rates saw their monthly payments triple, and the removal of tax relief on mortgage interest payments for landlords.
Walker says a further reason is the extra costs of complying with the UK’s ballooning regulations for the private rented sector.
“This increases rents in two ways. Firstly, landlords need to recover the direct cost of local authority licences, electrical checks, gas safety certificates and the almost compulsory inventory and check-out fees,” he says.
“The only way they can [recoup] this is through higher rents.
The second effect of increasingly complex compliance legislation and the savage fines that are imposed for minor breaches is that it is frightening landlords so much that they are giving up and leaving the market."
Walker says the basic laws of supply and demand means this will inevitably drive up rents.
Overall he says that recent Government ‘anti-landlord rhetoric’ has been almost entirely responsible for the huge increase in property rents.
But he claims that the situation could be worse – many landlords are unable to exit the market because of the likely enormous capital gains tax bills they would face, while others don’t have mortgages and therefore haven’t been affected by rising mortgage costs.