Landlords with small portfolios are being disproportionately impacted by an increasingly regulated PRS, according to Shadow Housing Minister Kevin Hollinrake (main image, right).
Speaking on The Agent’s Journal Podcast, the MP and founder of Hunters estate agents, says it’s also wrong to think that all regulation helps tenants.
“A heavily regulated sector that’s really good in terms of a specific problem for a tenant isn’t very much good if that tenant can’t find a house to rent,” he insists.
While large build-to-rent groups such as L&G and Grainger would cope with regulation, those landlords with a few properties have much more at stake, believes Hollinrake.
“When you say to a landlord ‘well you might have eight months without rent and you can’t use the normal section 21 process to get somebody out of a house at the end of the term who’s a difficult tenant’ then that landlord is going to think ‘I’ve had various things thrown at me over the years like increasing regulation around standards - some of which is perfectly reasonable and some which aren’t’.”
Hollinrake points to the situation in Scotland where there has been a 10% decline in stock availability and higher rent increases following the abolition of no-fault evictions.
He believes landlords are exiting the market in England and says those with smaller portfolios are being hit hard, which is not good for tenant choice.
“A lot of people in the Commons think the private rented sector is all blocks of flats, but it can be a little cottage in a village or a three-bed semi – and landlords with one or two properties are more likely to be responsible for those kinds of properties, so choice will be dramatically limited because that landlord will think ‘I can’t afford nine months without rent’, so that risk reward ratio changes and people will be driven out of the sector.”
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