Rising rents and lack of supply in the privately rented sector (PRS) are the result of long-term failure in government housing policy and is not landlords’ fault, peers were told during the Renters Reform Bill second reading last night.
Lord Truscott (main image) who has been a landlord for 30 years, said it was unfair to blame the current housing crisis on landlords when the government had repeatedly failed to meet their housing targets of 300,000 new homes per year.
Although the PRS had survived during buoyant times, it was now in serious trouble. “Landlords are being seriously squeezed,” he said.
“Some 1.7 million landlords have buy-to-let mortgages, and some face a tripling or quadrupling of their mortgage interest because of interest rate hikes.
“Capital values are so high, and rentals so relatively low, that the return on capital, even without a mortgage, is less than 2%. With tax and voids, a landlord may end up paying a tenant to rent from them in parts of the country.”
Purely short-term tenancies would be a disaster as most banks require six-month minimum tenancies to lend, while all the admin needed at the start of each tenancy such as letting agent’s letting fees, tenant reference checks and an annual deposit check charge could come to several thousand pounds or more, said Lord Truscott.
“The idea that this could happen every couple of months would simply mean landlords would further increase rents to cover this and repeated voids.”
He was concerned a fee for an ombudsman scheme and property portal would be yet another burden on the sector.
“Similarly, some local authorities are charging landlords to license their rental properties, which can result in landlords becoming local authority milch cows and increasing rents for tenants.
“In the light of all the reforms in the Bill to bring the PRS up to standard, which I welcome, selective licensing should be abolished.”
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