Private Rented Housing Sector Reliance
All the main political parties are targeting the Generation Rent vote ahead of a potential snap general election, at the expense of landlords, while dismissing the fact that there is now an overreliance on the private rented housing sector to provide accommodation for those with a long-term housing need.
The opposition parties support the government’s proposal to scrap the use of Section 21 notices to evict tenants, despite the fact that this could lead to a sharp drop in the supply of properties to let in the private rented housing sector.
Fresh economic analysis by Capital Economics on behalf of the National Landlords Association (NLA) forecasts that there will be a 20% drop in the number of properties available to rent if Section 21 is scrapped, adding to the widening supply-demand shortage which would almost certainly place upward pressure on rental values.
Removing Section 21 could prove devastating for the PRS, with almost half of landlords and letting agents more likely to reduce some or all of their investment in the sector, according to a separate survey by the Residential Landlords Association (RLA).
The poll of almost 6,500 landlords and letting agents found that 46% of landlords and letting agents could quit the buy-to-let market as a result of the government’s plans to end Section 21 evictions.
The study also found that more than 40% of landlords are waiting for other planned changes by the government to become clearer before they make decisions on their ability to provide homes to rent.
But while the government is blamed by many politicians for the existing housing crisis, Tom Gatzen, the co-founder of room share platform ideal flatmate, believes that the government is at fault for the existing state of the property market.
He said: “For far too long there has been an overreliance on the rental sector to house those that can’t afford to buy as a result of the government’s consistent failure to provide more affordable housing.
“We’ve already seen the rental landscape evolve with more renters having to rent rooms rather than outright properties due to high financial barriers, and the abolition of Section 21 will only see this increase as demand grows and the number of available properties declines.
“While the latest shake-up of the sector has been done with the best intentions of tenants at its core, such a drastic move needs to be better thought through and complemented with additional policy changes, to ensure the sector remains viable for the landlords that form its foundations.
“As it stands, those most in need are in line to be hit the hardest, while the rest of us will see yet more of our income go towards covering our rent.”