“Hands off the private rental sector”
The National Landlords’ Association (NLA) warns that whoever wins the Conservative party election – Boris Johnson or Jeremy Hunt – will face a major crisis in the private rented sector (PRS) if the Government is not prepared to rethink its plans to impose more stringent regulation on an already over-regulated PRS.
The dire warning from the NLA follows evidenced gathered by the association that around 86 percent of landlords consider it either “likely” or “very likely” that they will be selling-up and leaving the private rented sector, if the planned changes to the eviction tenancy laws are implemented.
Around half (46%) of private residential landlords invested in rental property to provide an income, or a supplement to their income, as they retire, as an alternative or addition to a standard pension pot. This was a very popular trend which followed various almighty pension scandals such as those of Equitable Life and the infamous Robert Maxwell debacle. Gordon Brown, Labour’s chancellor then exacerbated the pension fund confidence crisis with his famous “tax grab”, still little changed under the present Tory regime.
So, with the recent penalising changes to the landlord tax laws, and a plethora of new regulations, and more still in the pipeline, the NLA’s research finds that landlords are increasingly pessimistic about the future. Little more one-third of those NLA members surveyed feel any degree of optimism about their business prospects for the future.
With a declining income from renting out properties, many elderly landlords may be forced into selling to fund their old age, triggering a crisis in the supply of rental accommodation, at a time when demand has never been higher. Such a shortage would only mean one thing – higher rents.
NLA chief executive, Richard Lambert, has said:
“Many landlords are telling us that the latest changes to the regulations affecting the private rented sector are the last straw.
“These are not the greedy or unscrupulous people that many would have you believe. They became landlords in order to fund their retirement, but they are being backed into a corner because the government’s plans to change the regulations—such as the proposal to abolish Section 21 of the Housing Act—is making it harder and harder for them to generate sufficient income.
“If they are left with no option but to sell their property and exit the private rented sector in order to fund their retirement, then given how many landlords are retired or approaching retirement, the chances are that there will be a sudden and significant shrinkage in the size of the private rented sector. If that happened, it is a racing certainty that the current housing crisis would get worse.”