Renting & The Election: Will Lettings Gain or Lose?

As Election fever begins to grip the UK, we’ve seen propositions for reform that have varied in shades of feasibility and usefulness. As a local estate agent, it is our duty to inform and protect those that live within the properties that we let on behalf of landlords, as well as the landlords themselves that use our services.

How long is right?

In some quarters, the PRS (Private Rental Sector) landlord community is claimed to be significantly infected with ‘rogue landlords’. There is no doubt that such landlords exist, but how big a problem are they nationally?

Then there is the problem of short fixed terms. We have not read any of the manifestoes in any detail, but we understand that Labour are promising three-year long fixed terms as the norm.

But do tenants really want this? Many tenants do – but how many? What happens if someone gets locked into a tenancy they then find is wrong for them? What can landlords do if they get stuck with a delinquent tenant and no easy way to evict them?

Both landlord and tenant organisations have compelling arguments. I have sympathy with both of them, but I am not convinced that either organisations provide an entirely accurate overall picture.

Transparent, accessible information

What is needed now is good/reliable information about the private rented sector – how many homes, how many landlords? What are the rents? What is the condition of the properties? How long do tenants remain in occupation? The questions could continue.

There is a sound case for a landlords register and landlord & agent accreditation. This is being introduced this year in Wales. If this works well , it could be rolled out nationally.

What are the consequences of getting it wrong?

At the moment, an increasing proportion of the population is being housed in the Private Rented Sector.

The vast majority of PRS landlords are ‘small landlords’, who own just one or two properties as an investment – often in the hope that it will provide them with a more reliable pension than they could get from the financial institutions.

We will often say to landlords, however, that being a landlord is not ‘just’ a financial investment, but also a commitment to provide a reliable and essential service.

We must not however lose sight of the fact that we are talking about a major investment.

The reality is that if housing ever stops being a very good investment, people will stop investing.

The impact of the Rents Act

We already know this – in 1914 around 80% of households lived in private rented accommodation. After the various Rent Acts giving stronger rights to tenants, this percentage dwindled to around 8% in the 1980’s.

If investing in the private sector once again becomes a poor investment, what will happen this time around? Who will buy the properties that landlords no longer want to keep? – given that the families currently living in them won’t be able to afford to buy them.

Conclusion

I don’t have the answers but I very much hope that those in a new government will think very carefully before acting.

We already have big changes to accommodate in the Deregulation Act later this year.

It seems to us that it would be sensible to see how those changes bed down, judging how the Welsh reforms work out before introducing too many hasty and untried reforms.

Charles

About Charles

This blog follows the residential Sales and Lettings market in Harrogate, Knaresborough and surrounding villages.You will find information, analysis and guidance here along with news about Harrogate. I’m Charles Myring working in the Myrings Estate Agents Ltd business alongside my son Simon , daughter Gemma and dedicated sales teams. If you're thinking of Selling / Buying / Letting / Renting property locally Myrings would be happy to assist.