The flight of landlords from the traditional rental market to Airbnb is creating a growing housing crisis, councils have warned.

A survey by the District Councils Network (DCN) has revealed that 76% of councils said a lack of spare capacity in the private rental sector had caused a rise in housing waiting lists, while 48% said it was causing significant pressure on their housing services.

Several trends are driving this particularly within holiday resort areas including an historic shortage of council housing, the pandemic, the staycation boom and landlords quitting the sector as additional taxes and regulation take their toll.

The research also found that the consequent rise in rents was putting pressure on tenant finances and leading to a rise in applications to council hardship funds, a problem that will increase as the Government maintains its Local Housing Allowance freeze next year.

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The DCN, which represents some 200 district councils, is calling on the Government to increase investment in council housing and give councils the tools they need to create their own permeant housing for those facing hardship.

Perfect storm

Cllr Sam ChapmanAllen (pictured) Chair of the DCN, says: “This survey reveals a perfect storm of problems creating a crisis in the private rented sector across the country.

“Now the Government’s Eviction Ban has ended, this is a problem that could get worse, with councils also seeing increase in the numbers of tenants needing housing support due to increased evictions due to rent arrears.”

Eleanor Bateman, Policy Officer for Propertymark, says: “Concern about a shrinking private rented sector is not a new conversation, but it is one that is not being acknowledged.

“If the situation continues to be ignored by decision makers fixated on taking a piecemeal approach to legislation we shouldn’t be surprised if the number of people on housing waiting lists skyrockets.

“With the removal of Section 21 on the table, unrealistic energy efficiency targets, and the attraction of short-term letting, the UK Government will find that the private rented sector continues to diminish, and homelessness will rise.”

9 COMMENTS

  1. Well, well; wakey wakey to the obvious spin-off from a decade or more of misguided on-the-hoof populist policy, not to mention decades of not building enough social housing – in particular in cities; I’m sure the relevant minister, Gove is all ears and then action. Not.

  2. “With the removal of Section 21 on the table, unrealistic energy efficiency targets, and the attraction of short-term letting, the UK Government will find that the private rented sector continues to diminish, and homelessness will rise.” I would add, “and the constant abuse of landlords”.

    This comment in the article made by Propertymark is realistic, will the Government who appear to be on course to appropriate private property to provide free accommodation with no recompense to the property owner take any notice? No chance.

  3. No Surprises here especially when coupled with this article… “NAO probes ‘piecemeal’ regulation of PRS and lack of ‘joined-up thinking’”

    Clearly no joined up thinking in govt and EVERYONE who has a finger in the pie, shelter etc still fail to understand the most basic of investment strategies. Seek maximum gain from capital invested with the minimum possible risk to that capital.

    Investors are being driven from the PRS into less risky investments with similar returns… Not rocket science.

    Rents rising fast as available properties diminish… Homeless crisis is around the corner and govt cant requisition any more hotels ‘cos they are full of refugees from France.

    Sounds like a strong case of homelessness “Indigestion” will need some might powerful “Laxatives” in the form of de-regulation and investor incentivisation to ease the blockage and bring much needed “Relief”…

  4. A good plan Dave but the chances are the remedy will be more legislation, planning permission and taxation so as to discourage Airbnb and holiday lets. Will it encourage people back to PRS? Out of the frying pan back into the fire? I don’t think so. The underlying message is that if you are hardworking and have been fortunate enough to amass wealth in the form of a 2nd home, (out of taxed income no doubt) you must pay the price and have your wealth redistributed. Either way we will be taxed by whatever means. I mean if we go back to social housing as the norm, who will pay for that ? Nothing is free and I am afraid life is going to get tougher for everyone (including tenants) as the days of cheap commodities, housing, medical cover and fuel are over for the forseeable. Covid just lifted the lid on what was already happening

  5. There is NO obligation for LL to use their letting properties for traditional letting.

    It is just that in the past traditional lettings were the most profitable.

    With the continuing Govt attacks on LL the traditional letting model is no longer viable ESPECIALLY mortgaged sole trader LL.

    LL with mortgaged LL will continue to commit mortgage fraud to let out on short term basis.

    There are no traditional BTL mortgages that permit short term letting of any sort.

    Few lenders would give permission for for a conventional BTL mortgage to have CTL for short term letting.

    It is therefore a fact that most mortgaged short term lettings are fraudulent.

    Nobody seems to be picking up this situation.

    NO insurance company permits short term lettings with a conventional BTL mortgage.

    I don’t blame LL for committing mass fraud.
    I would do the same if able to.

    LL have little choice than to commit mass mortgage fraud.

    Short term lettings are currently more profitable.

    More income is required to pay ridiculous S25 tax bills.

    LL can’t create fictitious money to pay tax on fictitious income.
    So they are forced to commit mortgage fraud.

    Mortgage free LL without flats can operate short term lettings fraud free though they would need to advise their LL insurer.

    Any mortgage free LL with flats would be committing fraud as very few blocks of flats allow short term lettings.

    Certainly NO block insurance ever covers short term lettings.

    So about the only fraud free short term lettings are with mortgage free houses and even then like in London there are council conditions etc.

    LL cannot be blamed for committing mass fraud.

    Govt has forced LL into a corner so they have no choice.

    LL will continue to withdraw conventional lettings converting to short term accommodation.

    The LL short term lettings fraud will continue apace.

    LL don’t have much choice!

  6. The government and local councils have over legislated on private LL for years, stamp duty, increase in council tax’s, more difficult to evict problem tenants, and who would have believed that the government gave the green light for people not be pay their rents ( landlords still had to maintain and pay mortgages ) in the covid period by protecting tenants from eviction I personally know 2 landlords who went under due to this. The government is even considering forcing landlords to take on housing benefits, If your property is damaged or they don’t pay rent who can you turn to, the courts? that’s a joke your left on a rock with no help or assistance from anybody Its easy for people to draft legislation try being a private LL for a year bet you soon change your mind, I don’t blame LL for leaving this area of business it simply isn’t worth it

    • Interesting that you suggest LL would be forced to take on DSS tenants.

      That would be an effective rent control.

      I charge DOUBLE the LHA rate for my property type.

      Plus my lender won’t allow DSS tenants.

      Then we have my Council insisting on a valid TA BEFORE they will consider a potential LHA award!!!

      So being forced to take on DSS tenants would effectively bankrupt me

      How does that assist DSS tenants!?

      We are talking effective Communism here.

      Lenders would require properties to be sold.

      There wouldn’t be any LL able to offer DSS tenants any rental accommodation.

      The PRS would be rendered unviable.

      Socialism/Communism never works as eventually it runs out of other people’s money.

      I have never heard of anything more ridiculous than DSS acceptance being Compulsory.

      As for your anecdotal evidence of 2 LL being put out of business due to ridiculous covid eviction conditions it is precisely because of such potential issues that I’m getting out of the game.

      If am prevented from removing feckless rent defaulting tenants in a timely fashion then the business model is unviable.

      I cannot and am not prepared to risk subsidising feckless tenants

      So I will be making 16 occupants homeless as I sell up.

      That is what the Govt is effectively doing……..causing homelessness!!

      • That is what the Govt is effectively doing……..causing homelessness!!

        Entirely agree…

        No joined up thinking in govt is driving investors out of the sector. We are heading back to the 1970’s when the PRS collapsed due to over regulation. the current system we have was purpose built in the ’80’s to deal with that collapse it was not cobbled together. It was well thought through and brought in as a total package and worked fine for many years.

        Interventions in markets ALWAYS results in failure, just look at the gas sector where govt caps are driving gas companies to the wall.
        The vast majority of investors provide good quality homes that far exceed what is provided by Local councils/housing associations etc.

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