Landlord Exit May Shakeup Housing say's Linkedin
How do you see the UK's buy-to-let property market shaping up in the months to come? Join the discussion in the comments below.
It’s difficult to see how this is going to be good for the property market, both from a valuation standpoint but also placing further upward pressure on rental costs as supply reduces even more. A staunch lesson in diversification here. Landlords have geared up with interest only mortgages over the years, giving themselves astronomical levels of interest rate risk. This is exactly why all eggs should never go in one basket. If sales continue to happen this is also not going to help inflation with rental / housing costs being some of the highest contributors toward inflation. Adam Lockwood
Missing the point?
The article is correct that rental demand far outstrips supply and this is getting worse. However, it totally fails to identify why landlords are exiting the market and suggest any meaningful solutions. As a landlord myself who owns a property investment business, I know the pain caused to landlords by tax changes and how challenging the eviction process can be. Rising interest rates combined with legislative changes are resulting in the profession becoming unprofitable the thousands of landlords, who are now exiting the market. Recent changes particularly hurt 40% of taxpayers who have the potential income to be able to afford a rental property.
What the media doesn't tell you is that most landlords own one maybe two properties. They are not large corporate machines. They are mainly one-man bands. Ordinary people are trying their best to keep their assets cash flowing positively in the face of high-interest rates, high taxation and long, drawn-out eviction processes. We cannot expect landlords to run their properties at a loss. They are not charities and the risk-reward is upside down at the moment. A landlord may make perhaps a couple of hundred pounds a month (if they are lucky and perhaps not on today's interest rates) and all it takes is one boiler breaking to wipe out their profits over a year or one tenant that decides not to pay their rent and they could be looking eight months with no income and all the costs. The system is not working for hundreds of tenants and landlords there remains a huge opportunity for reform.
Market conditions need to be accounted for by the government to ensure the industry remains profitable and in my view addressing profitability, through taxation and the ability to quickly and effectively deal with problem tenants, will be the quickest and easiest way to keep and attract landlords, increasing supply and ensuring that those that want or need to rent have access to high quality and affordable housing. We specialize in Houses of Multiple Occupation (HMO) in and around Sheffield where rooms are rented out individually, as opposed to the entire house. HMOs by their very nature have the ability to reduce the rental deficit as they provide more accommodation per house and should be utilized as a tool to alleviate current rental demand. They have the advantage for landlords and investors of being more profitable than single-let properties, making them a win-win for both the tenants, landlords and investors. These are a solution articles can reference and governments and councils should support the increase in order to deal effectively with a housing crisis. Georgina SmithGeorgina Smith
When will the government wake up to the looming disaster they have created within the Private Rented Sector!!! Demand is through the roof, supply levels shrinking fast and we are getting call after call from desperate families who who are now either priced out of the market or simply cannot find suitable properties to rent if something isn’t done in the next 6 months to encourage re investment in the sector and to remove punitive measures such as Section 24 we will see one of the worst housing crises in living memory unfold in the next 2/3 years Matt Eastham
BBC reporting this without any real assessment of why Landlords are disappearing from the rental market.
The nuance is how hard the government (a Tory one, at that, who should understand the consequences of their actions) has hammered landlords with all kinds of tax changes, and the worst blow of the lot is the disppearance of no-fault evictions, making an already illiquid investment even more so with a huge chance that tenants who don’t pay rent cannot be evicted for a long time as any court action gets clogged up in a system that cannot cope (no matter what they say about making it easier), with resulting loss of rent that landlords depend upon.
So, whilst, on the face ot it, it can lauded as great news for tenants, it is a retrograde step for them as the overall rental property will shrink, demand will outstrip supply and, guess what, shock of all shocks, rents go up sharply. Steve Wareham
I said two weeks ago that the price of fixed mortgage rates were peaking...
Today HSBC became the first of the big UK lenders to start reducing their fixed rates. This follows on from the positive inflation data last week, and downward movements in the SWAP markets where lenders hedge their fixed rates. Other lenders will follow in the days and weeks ahead, and suspect it will be similar to last Autumn in that rates will reduce very gradually week after week, month after month, as lenders start to compete for business again. As I've consistently said, it's imperative that borrowers booking a fixed rate in advance for house purchase, re-mortgage or rate switch purposes, only do so with lenders that allow them to cancel and re-select a product should a lower priced fixed rate become available prior to completion. Tim LynchTim Lynch
This won’t be new news to anyone who has tried to find a rental property in recent years. Demand for property particularly in London is always high and this will vary depending on which part of London you are looking in. 5 tenants for every property available in London as a whole is actually lower than some areas that we cover at John D Wood. It amazes me that rental properties sit on the market for so long but considering the cost of living crisis that impacts tenants and landlords, getting the right price is often the key non negotiable. It is important to make sure that everyone is prepped and ready for to work together to get the best outcome. If you are a tenant or landlord that needs some assistance please get in touch. We are here to help. Communication is key on all sides. Peter Winterbottom
I saw this article last night and thought I’d share it here as it underlines what I have been saying about a lack of rental property across the UK. It clearly demonstrates why the right property, in the right place, is a good investment. The range of well-reserched developments I can offer make the decision easier for you, and you can buy with confidence. Get in touch for a friendly, no-obligation chat about how you can invest in UK property as part of your long-term financial planning. It's easier than you think. Keren Bobker
I have first hand experience of finding somewhere to rent in London recently and it is hard. There are some great proptech solutions and agents using them to reduce this number down to a much more realistic number but probably still in double figures. t’s no surprise that when demand outweighs supply prices go up. Rich Wynn By Manas Pratap Singh, Editor at LinkedIn News