Housing professionals are worried that the Renters’ Rights Bill will further drive out smaller landlords – creating a market dominated by big ticket investors.
That was the message from the first Landlord Trends workshop hosted by Pegasus Insight, along with contributors from Hometrack/Zoopla and the National Residential Landlords Association.
In 2010, landlords with just one property made up 78% of the PRS.
However, that figure has dropped to 45%, as 50% of private rented property is currently owned by just 20% of landlords.
Given this backdrop, there are calls for the government to leave the private rented sector alone after the Renters’ Rights Bill goes through.
Bethan Cooke, director of Pegasus Insight said: “These findings present a stark warning to government. It must find ways to nurture the PRS and encourage more investment in the sector if we are to avoid severely deepening the UK’s housing crisis.
“As a start point, the government should promise policy stability in order to boost landlord confidence.
“It seems too late to turn back the clock on the Renters’ Rights Bill, but the government should commit to no more legislative changes and no further tax increases for landlords.
“Research we carried out before the last Budget revealed that 39% of landlords would stop investing and 19% exit the market if CGT on the sale of second properties were increased.
“Rachel Reeves made the right decision in not hiking CGT in October 2024. She must not be tempted to squeeze landlords further in future.”
Some 81% of landlords believe the Renters’ Rights Bill will have a negative impact on the PRS, with the removal of no-fault evictions being the top concern.
That is only topped by worries about potential changes to Capital Gains Tax (CGT), which concerns 85% of landlords.
The prospect of the Renters’ Rights Bill is already forcing changes in behaviour: 81% of landlords say they will be more selective about who they let to once the Bill is introduced; 62% will put rents up and 23% will look to cut costs by spending less on maintenance.
Most significantly, only 5% of landlords intend to increase the size of their portfolios this year. This figure has been on a downwards trajectory since Q1 of 2022, when 18% planned to expand – 5% is a record low. What’s more, those planning purchases intend to buy an average of 1.9 properties, while those looking to sell plan to offload 2.9 properties.
Via @PropertyWire