A recent government report has revealed that three in ten landlords are considering reducing the number of properties they offer or leaving the market entirely, raising concerns for renters. This is largely attributed to the high interest rates on buy-to-let mortgages and tax changes, which have made renting properties less financially viable for landlords.
In response to these developments, there have been discussions around the potential implementation of rent caps to protect renters from soaring rental costs. Labour’s Shadow Chancellor, Rachel Reeves, has expressed support for giving local councils powers to cap rents in some areas, acknowledging the need for local autonomy in making such decisions.
In light of these concerns, a report commissioned by Labour has proposed the use of rent controls, recommending that rent increases should be linked to local price and wage growth. On the other hand, critics argue that such measures could lead to more landlords selling their properties, ultimately exacerbating the issue of homelessness.
According to the National Residential Landlords Association (NRLA), 45 percent of people seeking council assistance to prevent homelessness in the latter half of 2023 were at risk due to their landlords planning to sell up. This statistic surpasses other common reasons for the termination of rental tenancies, highlighting the significant impact of landlords exiting the market.
Amidst these developments, it was found that 83 percent of landlords reported a strong demand for rental properties from tenants, indicating a robust rental market. However, the same survey also revealed that 31 percent of landlords plan to reduce the number of properties they rent out, compared to only nine percent who intend to increase their rental offerings.
Furthermore, recent data from Rightmove suggests that approximately 50,000 properties are needed to restore the supply of rental homes to pre-pandemic levels, emphasising the shortage of available rental properties.
Ben Beadle, Chief Executive of the NRLA, stressed the urgency of addressing the underlying issues, stating that “landlords selling up is the single biggest challenge renters face”. He called for policies that would incentivise responsible landlords to remain in the market, ultimately boosting the supply of rental properties.
The potential exodus of landlords from the rental market poses a real threat to renters, and it is crucial for policymakers to consider sustainable solutions to address this pressing issue. As discussions around rent controls and other potential measures continue, it is essential to find a balanced approach that protects the interests of both landlords and tenants, while also ensuring the continued availability of rental properties.
By addressing the underlying concerns of landlords and implementing policies that encourage investment in the rental sector, it is possible to mitigate the risk of widespread property sell-offs and maintain a healthy rental market for both landlords and tenants.