National letting agent trade body Propertymark has told the Chancellor that unless the private rented sector is overhauled a significant number of landlords will quit the sector.

The organisation says within its submission to the Sunak’s Autumn Budget and Spending Review that the rental market is already facing a ‘cliff edge’ as the private rented sector struggles to keep up with demand, but that rent arrear and a crumbling court system are making the situation worse.

Such an exodus of landlords would be catastrophic for the housing system, including the many people who rely on the private rented sector to meet their housing needs.

Research completed recently by broker The Mortgage Works found that 20% of landlords are likely to sell property in the next 12 months.

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Tax implications

Propertymark says this is down to a combination of moving goal posts, tax implications, tenant debt and a backlog in the courts as reasons many smaller portfolio landlords are being left with few options.

The trade body says the effect on landlords has been compounded over the pandemic and official government figures show the proportion of private renters in arrears has tripled during the pandemic, from 3% between April 2019 and March 2020 to 9% during November and December 2020.

It warns that if the upward trend in this data continues the number of renters in arears could reach almost 800,000 by the end of 2021.

Mark Hayward, Chief Policy Advisor for Propertymark says: “We are urging the UK Government to look at the bigger picture here.

“It’s not about propping up landlords but more about doing the right thing for the country as we work to build back better from the devastating effects of the pandemic.”

4 COMMENTS

  1. Govt is determined to eradicate small LL especially those who use mortgages.

    Supporting feckless tenants remains the biggest threat to LL viability.

    Govt seems determined to support feckless tenants as indicated by feckless anti-LL policies.

    It is only to be expected that LL are giving up on the single household AST business model.

    Incidentally I don’t recollect many LA supporting the S24 JR so LA can get stuffed.

    We LL don’t need them.

    What LL need is an effective way to quickly get rid of feckless rent defaulting tenants.

    That means 45 days and tenants are removed.

    Two years is what it will take.

    It is no surprise that LL are moving to SA and FHL business models.
    The AST one is broken because of the dysfunctional eviction process.

    We now have whingeing from Labour Councils that there is insufficient long-term rental property.
    There is NO divine rule that LL should use their properties for long-term renting.

    LL are entitled to exploit their property investment assets for as much as they can.

    That means FHL and SA.

    If that means fewer rental properties for tenants then that is just TOUGH!

    LL are only moving away from AST letting because of anti-LL policies.

    Govt will be very frustrated that its attempts to eradicate LL is being stymied by LL moving away from the AST business model.

    It won’t be long before Govt introduces new policies aimed at eradicating FHL and SA profitability.

    It’s aim is to force LL to sell up by making their investment assets unprofitable.

    Taxing them out of existence is the most effective way to achieve this.

    Consequently Govt has yet to introduce those penal tax policies.

    But make no mistake they are coming.

    Letting Agents are deluding themselves if they believe that LL will stop leaving the PRS.

    The sector will continue to shrink as long as Govt continues with anti-LL policies.

    This will affect L Agent viability.

    I’m afraid the future of the PRS is very gloomy one.

  2. It is without doubt that this and the previous government has relentlessly targeted LL’s. It is also without doubt that this is, primarily, to win tenant votes.

    Thing is..how many tenants are going to be voting for a (red Tory) party that has been directly responsible for greatly increasing their rents and decreasing their choices?

  3. Answer me this question please Gas, Electricity, Council Tax, Food, all essential for living amongst many others are just as important as a roof over a family’s head yet, these organisations can insist on immediate payment. Why can’t a Landlord do the same?

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