BTL landlords reassured ‘there is still a process of debate and discussion before any legislation is brought in’

The government’s proposal to abolish Section 21 of the Housing Act and reforming the grounds for possession, as part of a new Renters’ Reform Bill, is viewed by many buy-to-let landlords as another attack against landlords who provide crucial housing for private renters.

If Section 21 is scrapped, Section 8 must be reformed. Without this, supply in the PRS will almost certainly fall which will have the consequential effect of raising rents and will further discourage new landlords from investing in the sector.

Nathan Emerson, CEO Propertymark, commented: “Pressures on the sector are not easing, especially in England given that the recent Renters’ Reform White Paper has now been published.

“What’s important is that landlords understand that this paper is a set of proposals and that there is still a process of debate and discussion before any legislation is brought in. The UK government have also committed to ensuring landlords have access to their properties via a revised section 8 notice.”

The widening supply-demand imbalance in the PRS continue to push rents higher.

Propertymark reports that there has been an increase in availability of properties to rent since February, but demand from prospective tenants has also risen.

The latest research from the trade body shows that its members reported having 10 properties on average per member branch that were available to rent in May. This is very similar to April’s figure, suggesting that little has changed in terms of new stock levels since last month.

An average of 113 new applicants were registered per member branch in May. This is up since February when 78 new applicants were registered on average. This slow and steady rise appears to mirror the increase in available lets. As rises in demand match increases in available homes, pressure on rents is set to continue.

Agents reported in May that the average void period between tenancies is below two weeks. This is over one week less than the long-run average for May which is a little over three (2015-2019).

Some 79% of member agents reported month-on-month rent prices increasing in May. Pressure on rents has been steadfast since spring last year.

Emerson added: “Given the ever-widening gap between supply of homes and demand, it is crucial that government’s across all nations prioritise reforms that incentivise new and existing investment in the sector.”

SOURCE: Property Industry Eye | JUNE 27, 2022 | MARC DA SILVA