Aftermath Of Changes To Landlord Scene Continues To Take Effect

Aftermath Of Changes To Landlord Scene Continues To Take Effect
Following all the recent changes to the landlord and property scene over the last couple of years, it was not rocket science to have predicted that they would have a significant impact on the market as a whole.

With the introduction of higher Stamp Duty charges on second homes and investment properties, the reduction on mortgage interest relief and the tightening up of mortgage lending criteria for Buy-to-Let landlords, the recent Government actions have really 'set the cat amongst the pigeons'.

The fact is that we can now see those effects really starting to take shape.

Recently published figures show that the supply of available rental properties fell by 8% from December through to January, however, at the same time, the demand from renters rose.

This does not bode well for those who are in the position of renting their home or intending to move into rented property this year.

Over the last couple of years, nearly a third of renters have experienced rent increases and with the prospect of further rent rises in the mix too, it comes really as no surprise that the actions taken by the Government to clearly deter people from entering the Buy-to-Let market are having perhaps the opposite desired effect, in that it is making it harder for those who either choose or need to rent, to be able to afford or even find the right property to move in to.

To me, it begs the question 'Why has the Government taken such stern steps in this industry?'

I understand the point of view that they want to 'clean up' certain aspects of how 'rogue' landlords operate and that they may want to 'control the flow' of people getting into this business.

However, the fact remains that the vast majority of private sector landlords deliver a great service to their communities and are major contributors of housing those in the position of not being able to or not wanting to own their own home.

House building is not keeping up with demand (and likely won't for many years to come) and there is not enough public sector housing stock to go around. This gap has been filled in recent years by the PRS and stands to reason why many people have 'jumped on the wagon' to supplement their retirement buy owning BTL property.

It seems to me that private landlords are slowly being 'encouraged' to leave the market, but for what purpose and to what end?

The main 'losers' in all of this are the people who rent.

A recent report from ARLA (The Association of Residential Letting Agents) shows that supply of rental properties is close to the 'low' of October 2017 where it stood at 182 rental properties per member agent. Current numbers are 184.

The research also showed that more prospective tenants were registering at the beginning of this year which only increases the gap between supply and demand.

It appears that really everyone is losing out as a result of these measures. The landlord due to higher taxes and feeling deterred from entering or continuing with this business due to multiple new measures. The tenant due to a restriction on supply which is forcing rents to increase and making it harder to find a decent home and the Government, as the issue of supply and demand for rental housing is being affected even more than it was.

However, if you are prepared to 'weather the storm'...

...and can see that there are alternative ways in which you can build your property portfolio, then there are definitely opportunities for the more savvy investor to make the best of the situation and continue to build their business, whilst bringing those much-needed, decent homes to the market.

Let's face it, property is still one of the best asset classes to buy into, and despite the onerous measures, there are still very healthy profits to be made.

To learn more about exactly how to continue to build your property business, despite all the recent changes, hop on to my brand new webinar...

Register here now to see exactly how you could start or continue to build your property business in the best way.

Here's to your property success. :-)

Hazel de Kloe

Property Investor | Property Mentor | Speaker | Author

The contents of this article are for educational purposes only and we make no recommendations of any particular property purchase. The price of property can decrease as well as increase and you make any purchase in property at your own risk.

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