Can the Next PM Fix the Rental Crisis?
With the leadership race in full swing, can landlords rely on the next Prime Minister to fix the rental crisis?
The call for a fix comes as rents continue to rise and – increasingly – tenants struggle or become unable to pay as the cost-of-living squeezes everything from food prices to energy bills.
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There is also an increased demand for private rental properties combined with less landlords investing in properties to rent, which threatens to cause something of a bottleneck – and, to add to this perfect storm, there is an increase in regulations and taxes that may well deter new entrants to the market even further.
This week, the National Residential Landlords Association (NRLA) called for the government to consider all these issues. To back up and substantiate its claims, it has released the result of its latest survey, which found that 23% of landlords were planning to cut down on the number of properties they let in the next 12 months.
This is a steep rise from the fifth who said they would be making cuts when asked in the same survey a year ago.
A supply and demand issue
60% of landlords in England and Wales have reported a rise in demand for rental housing in Q2, which is significantly up on the 39% who were seeing an increase last year.
Ben Beadle, Chief Executive of the National Residential Landlords Association, said:
The last six years prove that it was a nonsense to think that cutting the supply of rental housing when demand is so strong would make it easier for those saving for a home of their own. Driving rents up just leaves tenants with less cash to save for a deposit.
Separately, Capital Economics has said its research has found that simply removing the Stamp Duty levy on additional properties would see almost 900,000 new private rented homes made available across the UK over the next ten years. This would lead to a £10 billion boost to government revenue through increased tax receipts.
Is it a government priority?
The question is – will the new Prime Minister make this a priority when they take office? There is an increasingly long list of things to tackle – from climate change having a significant impact on UK weather and the NHS struggling with the heatwave and a spike in Covid cases – so will landlords fall further down the list?
It may be that landlords will have to do all they can to help themselves until the government does more:
- Get RGI. With yet more energy increases due in October 2022 and January 2023, it’s likely that even the best and most reliable tenants will struggle with the rent this winter. Make sure you have Rent Guarantee Insurance so your outgoings are covered no matter what
- Get HEI. Home Emergency Insurance is a necessity no matter what, as otherwise these repairs will be coming out of your own pocket. But with the extreme weather we’re seeing, and knowing that properties in the UK are not designed for extreme heat and the flash flooding that is likely to happen – it’s time to make sure you’re prepared
- Know your taxes. Knowing all you can about your taxes will ease the mental burden that rolls around every tax season. We’ve got a playlist of tax videos to help you
There is no way of knowing what the new Prime Minister will do when they come to power, so the best thing is to prepare to be lower down on the list of priorities! Hopefully the new PM will see the need to step into the rental crisis and will affect real change!
