The UK rental market has been building to a crisis for some time. Renting in London is very competitive but so are many other UK cities, such as Edinburgh, Bristol, Brighton and Manchester. It is not all about the Capital.
The rental system is to blame which has been affected by ill thought through letting legislation by the Government. The topic is highly emotive with both tenants and landlords. Tenants don’t feel they have any rights and can be evicted by landlords under the 1988 Housing Act. There are proposals to change this to aid tenants with unscrupulous private landlords.
On the other hand, landlords feel that their investments and returns are just dwindling with the ever changing taxation rules and rental legislation.
Landlords are no longer able to offset mortgages against tax and the Truss mini fiscal budget accelerated issues. Yes, rents have been going up, which has affected tenants with minimal salary increases. However, landlords argue that with their mortgages and the recent interest rate rises with more forecast, when their mortgage products expire, the increased rent won’t cover the mortgage payments.
On The News Agents podcast there is one about the lettings crisis and there were some interesting points made. One portfolio landlord talked about might having to sell her property portfolio. She looks after her tenants and yes rents have increased. However, her current monthly mortgage payments are £400 per month per property. With the recent interest rate increases they would be rising to £1,800 per month per property. She points out that to cover that, rents would have to increase substantially. As she also points out , she does look after her tenants and that is important to her, but she may have to sell to survive and it is not just about being a ‘greedy landlord’. A case of sell of affect negative equity. This leads to less rental properties on the market, which leads to rent increases due to shortage in stock. A vicious circle with is not ideal for landlords and tenants.
With the benefits of being a landlord and investing in property diminishing, many are looking to sell.
That is the problem with the UK rental market. There is lack of supply, lots of people looking, rents rising in the mist of a cost-of-living crisis combined with huge gas and electricity price rises. Yet on that same podcast you hear of someone offering one year’s rent upfront and the landlord is still showing the property as they may get extra.
I have been in the property market for many years, advising clients on buying, selling and renting in London. I since founded Pets Lets, specialising in finding clients pet friendly rentals, which can be time consuming and you have to act quickly, and have personally witnessed a ‘crazy’ rental market. Normally you pay a holding deposit and that should take the property off the market. Most of the time it does, yet like with sales, people are being gazumped in rentals now.
There are proposed private rental reforms, but with changing Prime Ministers and Cabinets, there have been delays. These need to be introduced as soon as possible. Also, bear in mind that many private landlords are responsible and have buy to lets for their pensions. Many do look after tenants and like many industries, the behaviour of a few has a negative impact. The changes in legislation and interest rates have made it less worthwhile being a landlord in a property market where values are forecast to fall. On the other hand that is good news for first time buyers, however, interest rates have since increased.
Rental markets change. Landlords and tenants need each other. It was not so long ago during the first lockdown when it was a tenant’s market and landlords were having to accept lower offers from tenants. How things have changed. I do suspect that with the buy to let market less appealing to investors, we may experience current rental conditions for the foreseeable future.
This article was written by Russell Hunt, Founder of Pets Lets, a UK pet friendly property portal offering properties where landlords consider pets as well as a pet friendly relocation and buying service. Prior to setting up Pets Lets, Russell was a London property search consultant for over 25 years for clients looking to buy and rent in the Capital.
Click here to see useful pet cv’s and pets clauses, as well as other pet friendly rental tools on the Pets Lets Portal. A [Pet CV]( have a look at our example Pet CV’s, landlord references as well as template pets clauses, which can make a huge difference in convincing a landlord to accept pets.
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