Major property firm LSL Property Services has called for the Treasury to ease off on private landlords, suggesting that the Government looks for solutions to the housing crisis.
It also reports that the average monthly rent price in England and Wales fell to just under £800 in November.
Chancellor Warned to Ease Off on Private Landlords
Your Move and Reeds Rains, both companies under LSL, claim that the average rent is now £799 per month, a 1.2% decrease on the previous month and down from September’s record high of £816.
Although rents have fallen on a monthly basis, they have increased by 4% annually and the firms expect to see further rises in the early spring of next year.
Director of the two firms, Adrian Gill, believes: “Landlords have become fashionable targets for the Government and Bank of England.
“This is overdue attention for the sector that provides homes for more than one in five Britons.
“But negative campaigns and unconstructive policies, designed to attack landlords rather than support tenants, will not make rents lower or provide more homes.
“The effect will be quite the opposite, forcing rents upwards.”
Two-and-a-half years ago, LSL predicted that rents would surpass the £800 mark in mid-2015; this forecast was accurate, with rents breaking through that level in July of this year.
LSL also reports that rental yields for landlords have dropped, while tenants’ finances have worsened, causing more rent arrears.
Gill continues: “For new entrants, or landlords looking to invest in additional properties to let, market conditions could be a little harder to navigate than six months ago.
“Choosing the right property in the right area is even more important when looking for the best rental yield on new investments.
“Partly this is down to enormous competition in the property purchase market – homes are being sold rapidly, whether to landlords or owner-occupiers. It is a property seller’s market.”
He adds: “Similarly as yields continue to feel the pressure of rising prices, other factors will need to adjust in turn. That means higher rents. Most likely this will push rents higher still and indicates an earlier spring for rent rises in 2016.
“Combined with the latest attacks on landlords from the Government, this could propel demand even higher for every single home that landlords do have to offer.
“A continued shortage of properties to let is the challenge to overcome and the Government needs to think pragmatically about this conundrum, rather than looking for political targets.”1
1 http://www.propertyindustryeye.com/lay-off-private-landlords-lsl-firms-tell-chancellor/