Landlord and agent scare stories of increased rents again prove unfounded
In recent years a number of measures to increase regulation of private landlords and the buy to let system have been introduced.
After every single measure seen large numbers of landlords and letting agents claim costs will be passed onto private renters. Each time the same warnings come and go, yet figures out by the ONS today once again show that changes to fees has not transferred into higher rents. They state:
- Private rental prices paid by tenants in the UK rose by 1.4% in the 12 months to March 2020, unchanged since February 2020.
- Private rental prices grew by 1.4% in England, 1.2% in Wales and by 0.6% in Scotland in the 12 months to March 2020.
- London private rental prices rose by 1.2% in the 12 months to March 2020.
As ever more people rent privately politicians have belatedly noticed this is a demographic that needs listening too.
The largely unregulated market has thus seen standards tighten. Changes include ensuring homes are sufficiently insulated from April 2018. Landlords only have to meet a standard of E on the guide which runs from A (the best insulated) to F (the least) so E is hardly onerous, but out came the dire predictions that renters would foot the bill. It didn’t happen. Rents continued to increase below inflation.
Every single time I covered news on changes to buy to let some would pipe up that it will only hurt tenants through as costs passed on. It wouldn’t happen then groundhog days repeats with the next measures.
It’s as if rent levels are already at the limit of what people and the market can afford. If landlords could have increased costs they already would have.
Last year we saw another change as fees for tenants were banned. In many cases fees were extortionate and a family could be charged many hundreds of pounds for the most basic tasks. Add a person onto a tenancy? A five minute job some agents were charging hundreds of pounds for.
Once again out came landlords and agents en masse to claim this would immediately be passed onto tenants in the form of higher rents. Once again rents show no real increase above prior levels aside from less than inflation rises.
Another form of regulation was licensing private rentals and House of Multiple Occupation in areas of high anti-social behaviour. Newham led the way and this move revealed mass tax evasion. Half of landlords were failing to declare income costing £200 million. That was in just one London borough.
Government were not so keen on allowing mass regulation by councils so tightened up measures thus allowing only 20 per cent of homes across a borough to be regulated (alongside HMOs). Bexley, Lewisham and Greenwich all missed the boat on comprehensive regulation yet are now looking to adopt this measure on the more limited scale available.
At each stage of that ongoing regulation guess what happened? Landlords said it would be passed straight to tenants. Again, there was little to no evidence to support it.
Rents in areas such as London are already extremely expensive. We see it starkly at the present time as people in highly skilled and essential jobs are unable to work and forced into isolation across various flat shares as another member shows symptoms. They include teachers, nurses, fire fighters, police and many more.
The claims that landlords could simply whack up rents was and is a nonsense. If they could have they already would.
Landlords claiming they will go under due to having to meet minimal heat and insulation regulation, or pay fees working out at £100 a year begs the question of why they are even in the business of providing such as essential service as providing housing. If they have no buffer how were they ever given a mortgage? Providing they told the bank and HMRC they were landlords that is…
If new measures and ongoing tax changes do weed out the chancers and reduce buy-to-let speculators – and reduce house price growth thus allowing buyers opportunity to buy (many of those teachers and nurses in flat shares would have been able to buy in previous generations), then who will weep except landlords?
Of course buying is not for all. Unfortunately we have so many families reliant upon landlords who are in way over their head which only a mass program of truly low-priced housing can alleviate. But for many landlords getting out the game will free up houses that first time buyers can obtain. Homes don’t disappear when landlords sell up. Landlords are not providing an essential service as so many seem to think. When they sell homes become available for families to settle and put down roots in a community.
And save the “accidental landlord” stuff. What that often means is someone moved and chose not to sell the first home, or inherited a home and decided not to sell.
In the meantime expect many more landlords to complain as even minimal standards are introduced. Often it’s hollow complaints, and in the small amount of cases where genuine perhaps those people should never have been landlords in the first place. It’s not the gravy train they expected, and they can’t bleed tenants to provide it.