It seems whichever way you turn at the moment there is a squeeze on the private rental sector, with ever bigger hands trying to decimate this much needed area of the property market.
Literally on a daily basis you can read about the dire situation for private landlords, who, if you believe what you read in the press, should just be selling up and getting out. Interestingly though, much of this is coming from those at the top of the rent-to-rent conglomerates, who rub their hands with glee as the word spreads and ever more small landlords fling their hands in to the air, along with their keys and run for the hills. In addition, with the current government coming down on landlords in great crashing waves of changes, some obviously for the better, and others seemingly bureaucratic exercises to save face, the future for non-professional landlords can seem bleak.
However, let’s look at some facts;
In the UK, the private rental sector has grown from 2.8 million households in 2007 to around 5 million in 2019, that’s 21% of total households! The social rental sector sits at around 4.3 million. (Source – National Office for Statistics)
For potential buyers, mortgages are still no easier to obtain, deposits are just a pipe dream and analysis shows this trend is not about to change so private rental properties really are a necessity.
If we then take a look at the build to rent sector, it is certainly on the increase. Savills analysis states that there are 140,000 build to rent homes that are either complete, under construction or planned across the UK, which is an increase of 13% since this time last year but it is clear to see that, unless a miracle ensues, this sector is not going to be able to provide enough property for the private rental requirement of 5 million homes.
On the social housing front, figures from the Ministry of Social Housing show that 6,463 homes were built during 2017-18 down from nearly 30,000 a decade ago so a drop of 80% so local councils often have to rely on private landlords to supply social housing due to the lack of available property – there are around 1.15 million households on waiting lists according to the charity Shelter, which leaves a shortfall of around 800,000 homes.
With all of that in mind, you would think that the government would be looking to alleviate the pressure on the lettings market to combat the issue but listening to Ian Duncan Smith talk at the recent National Landlord Investment Show at Olympia, the sentiment appeared to be that, although it wasn’t official yet, they were seriously considering implementing more crushing restrictions on private landlords while offering government support of the rent-to-rent giants, such as Legal & General. None of which addresses the immediate need for housing, who is providing it and the effects of legislation which is deterring private landlords from being landlords at all.
What is interesting however is that if you actually ask tenants what they think, they are quite happy to be in private rental property. In fact, the English Housing Survey revealed last year that 84% of people are satisfied with their rental accommodation compared to 66% of social renters being satisfied. So, although the government is vilifying private landlords and making it ever harder for them to operate in the lettings arena, most are actually doing a very good job and tenants are happy to be renting.
In summary, maybe rather than demonising private landlords, perhaps it’s time that the sector embraces them and realises that they are imperative to meet demand and provide much needed rental homes. If you are a private landlord yourself and you are considering chucking it all in, remember the need is there, demand is actually growing and your tenants are most likely very happy with their rental property so hang in there, batten down the hatches and stay afloat as things could be about to get much better.
If you are a private landlord and want to ensure your investment is protected, we are here to help. Talk to us today about property inventories, check in and check out reports and mid-term assessments and property health checks.