Landlords Leaving and Licensing: Is it all bad news?
With some landlords selling up, is now the time to snap up a bargain?
With the current cost-of-living crisis dominating the news (and our bank balances) it seems like bargains are hard to come by at the moment. However, according to some recent research by Hamptons, if you’re in the market for a new property, you might just be in luck…
The research revealed that thanks to a combination of tightening rules within the lettings sector, increasing taxes and potentially narrowing profits, that in 2022 a whopping 140,000 landlords threw in the towel, with a further 96,000 are thought to be looking to call it a day this year.
These hefty figures represent a decent chunk of the market, so it’s looking like there may just be a flood of properties up for grabs for anyone looking for a bargain… but possibly not so positive for would-be tenants.
But why are landlords leaving the sector?
What is causing this mass exodus? Taxes and legislation have always been a big part of landlord life. Yes, it’s been a little bit crackers over the past few years, but has it really got SO bad?
Well yes, and no. Much of the change could be simply down to age.
Apparently 924,000 landlords in the UK are over the age of 65, so many will be looking to hang up their many hats and enjoy a well-deserved retirement anyway. Over half of the current mortgages on buy-to-let property were taken out between 1996 and 2007, many of which would have been purchased following the introduction of dedicated buy-to-let mortgages in 1996, so these have already been long term investments… Exiting now is not entirely out of the question.
It’s a scary thought though, investing in property as so many flee the market?
However, if the opportunity arises, the foundations of investing in property remain solid – regardless of the markets, bricks and mortar are holding firm. Tax needn’t be a concern with experts like Richard Cunningham on hand to untangle HMRC’s most confusing plans (check out his expert advice on the latest edition of the Mashroom Show!), and of course, the team at Mashroom are always available to help answer any questions if you’re concern about the risks.
And it’s also worth looking at those figures – yes, landlords are leaving the sector, but it seems that some of this is just because of natural retirement, leaving the way open for younger landlords to step in to realise their property portfolio ambitions.
Landlords and residents come together in Brent over selective licensing
Selective licensing is always a divisive topic. On one hand, it’s undeniably positive to try and keep up the standards within the private rented sector, but it can sometimes feel like there is a never-ending stream of paperwork requirements.
It’s rare however, that tenants and landlords come together in agreement on a piece of legislation, but that’s what has happened in Brent, where selective licensing has highlighted that possibly, a united PRS isn’t such a crazy concept, and maybe, just maybe, everyone actually wants to be singing from the same song sheet…?
Brent’s housing team, who have been operating a selective scheme in Dollis Hill and Kensal Rise since 2018, opened a 12-week public consultation to decide on the fate of the scheme, which was due to come to an end this month. One option was to renew the licensing scheme for another five years, with landlords being charged £640 for a five-year licence. The other option, proposed an extension, adding an additional 18 wards where there are currently ‘poor housing’ standards.
There are no prizes for guessing which way landlords were going to vote. One Brent landlord was reported to have said of the current selective licensing scheme:
I paid the fee and have seen nothing from the council. No checks, no property inspection.
The consultation, which came to an end in January and was replied to by 853 people, and whilst it was no shock that 75% of landlords opposed the extended scheme, a surprisingly high 25% of local residents and businesses also pushed for the same.
Overall, 46% opposed the larger scheme and 43% supported it – a fairly even split, which will make a decision for the Councillors, who are due to vote this week, a tricky one.