There’s been much talk in the news recently about changes ahead for the lettings industry. Aside from the long-awaited Renters Reform Bill, currently due its second reading, there are updates on possession processes, energy-efficiency expectations, and even caps on ever-increasing rents. Here we address the latest for landlords…
EPCs
Last week, plans were scrapped that would see landlords pay up to £10,000 per property for energy-efficiency improvements, with Sunak stating that Government will “never force any household to do it.” While any change in law is still waiting ratification, and even though it’s unclear as to whether minimum standards will be progressively tightened or taken off the table entirely, this is a topic that remains relevant. The axing of these measures will be welcomed by landlords in this cost-of-living crisis, saving substantial sums being spent on upgrades, but the NRLA urges Government to come up with a plan to support the sector in providing more energy-efficient homes.
Possessions
Some landlords have been waiting for more than six months to regain possession of their properties. This backlog continues as abolishment of Section 21 looms. Digitisation and increases to staff levels have been suggested as long-term fixes, while patience is required in the short-term. It’s to be seen how the Bill will affect the courts system, or what commitments to timescales will be made.
Rents
Last month, average rent surpassed £1,3000pcm for the first time. Rental affordability, now at its highest level for a decade, sits at 28.4%, alongside rising costs in energy, etc. Many landlords will be feeling the effects of higher mortgage interest rates, while tenants feel it in their increasing rents. Which leads us to…
Rent Caps
YouGov stats reveal over a third of landlords would sell if strict controls are brought in, severely impacting the already unbalanced supply of rental homes. While England sees no cap in place, Sadiq Khan has expressed calls for controls, Scotland has implemented caps of 3% during tenancies, and Wales is exploring the idea.
Adam Barker, Director, comments on the latest for landlords:
“We continue to see a more complex path for landlords, with increased costs and changes in legislation to contend with. As a juxtaposition, rents are the highest they’ve been, interest remains high, and more competition in insurance products like rent guarantee policies mean safeguarding your investment is cheaper than ever. Mortgage rates are thankfully on their way down, with buy-to-let mortgages as of today currently cheaper than residential owner-occupier mortgages, with rates as low as 4.8% on a two-year fixed term. Whilst there are likely to be more landlords priced out by higher mortgages rates, etc., those who stay the course will ultimately benefit due to a continued decrease in stock causing inflation in rental prices, and the costs of borrowing reducing.”
To discuss your own outlook as a landlord, contact us on 01525 40 22 66 or email ampthill@orchards.co.uk
