This week Gareth shares his views on the Private Rented Sector.
Followers of our property related blog will no doubt be able to cast their minds back to the burning embers of Chancellor (my bestie is Mark the Canadian at the Bank of England) Gideon’s time at the Treasury when it seemed that his bete noire-before he made the voodoo doll of Theresa May after she had given him his P45-was the private rental sector (PRS). He announced that he would “sort out” the growing breed of “nasty landlords” in order to “protect” generation rent. This was to be done through increasing stamp duty and hiking tax rates. Two things to note: 1. He does love a crusade doesn’t he? Preferably where he has an uncommon loathing for his target (see earlier comment re Mrs May) and 2. There was no campaign launched to protect landlords from ‘nasty tenants’. Ah well. At the time we commented that far from protecting tenants, it would do quite the opposite. RICS have just released figures showing that small, occasional or ‘one-off’ landlords as now selling up and leaving the buy-to-let (BTL) market place, whilst the demand from tenants for rental properties is increasing. The result-no need for answers on a postcard-is that rents are now on the up. In the not quite SW1 of NP44 we have noticed within the past 6 months that we can now get £25 pcm more for a 2 bedroom property than in previous quarters. So the crusade has benefited landlords as opposed to tenants. Well played Gideon. You didn’t see that one coming? RICS has called for the changes to be-if not reversed-then revisited. Come on lads, regardless of who is in the hot seat in Downing Street, even Jezzer and Diane ‘Abacus’ Abbott, would you take that risk? Forget the inconvenient fact that the B2L boom started under a Blair government, with one of its main proponents being a Mrs C Blair and that it has now replaced the council house market, the PRS now contributes significantly to the UK economy and no one is going to make drastic changes to this.
The simple economies of supply and demand-O Level maths grade B thank you very much-will continue and the demand for rented accommodation will continue to outstrip supply until councils start building council houses. Before someone starts shrieking that figures released last week show that first time buyer (FTB) completions were up 12% on last year take note of the comparable. Last year; not ten years ago. Compare the FTB market of 2018 to that of 2008 and there is still a huge difference.
So what will be the outcome? Nothing spectacular. Serious landlords will keep renting, tenants will keep renting, FTB will keep buying, people will keep getting married, divorced and dying, Jezzer will keep supporting his ‘terrorist organisation of the week’ and when questioned about it, will keep denying it and spouting ‘dialogue for peace’ wiffle-waffle, Spurs won’t win the Prem and I will keep a flame burning for Miss Minogue.