Landlords were firmly in the Government’s sights when it unveiled its plans this week to fix Britain’s ‘broken housing market’.
The plans were outlined in an official ‘white paper’, which covered potential extra red tape for landlords as well as an admission by the Government that it would like to encourage longer tenancies.
There was some good news in the housing white paper for property investors. It suggested that rents remain high as an average couple who are tenants send “roughly half their salary” to their landlord each month.
And it claimed that demand looks set to continue as high rents mean that it is “nigh on impossible” for tenants to save for a deposit to buy their own property.
However, there were also some less positive elements for landlords in the housing white paper.
It appears there could be more red tape on the way for landlords, with the Government considering mandatory electrical checks for rented properties.
The Government also wants to encourage ‘more family-friendly’ tenancies by making them longer term, ideally at least three years. However, it could only apply - at this stage - to rental homes provided by housing associations and institutional investors.
The white paper stated: “The predominant use of six and 12 month contracts mean that families who are renting need to move home before they had planned to, which can mean children moving school, alongside the uncertainty and costs associated with taking on a new rental property.
“We are working […] to encourage longer-term tenancies in private rental homes delivered by housing associations and institutional investors. We will be speaking to the Local Government Housing Association about local authorities’ appetite to do the same, where they are delivering market private rented housing through local housing companies.”
It added: “Further to this we will consider what more we can do to support families already renting privately, while encouraging continued investment in the sector.”
While extra protections and safeguards are welcome news for renters – especially for those who have experienced dishonest landlords – it is important that the relationship is two-way.
As Patrick Littlemore, director of lettings at Marsh & Parsons, pointed out: “Legitimate landlords must also have protection against rogue tenants, retaining the right to lawfully evict and any restrictions on this could spell disaster.” He went on to say that while three year family tenancy agreements will help give tenants security and stability, it’s important that they abide by the Housing Act.
According to Littlemore, the Government needs to make sure they don’t “dent enthusiasm” in the private rental sector. “The buy-to-let sector took a substantial hit with the increase of Stamp Duty in April last year and additional burdens could make this un-attractive, reducing investment and the supply of stock in the much needed private rental sector.”
As Littlemore pointed out, there is a growing demand for renting in the UK. “Discouraging investment would have huge ramifications for the many young professionals that rely on renting,” he added, “Renting gets a bad name but in reality, many appreciate the flexibility, freedom and choice that comes with it.”
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