The private rented sector is under threat. After years of tax changes that make it less appealing to be a landlord, the Renters’ Reform Bill is now causing many landlords of houses in multiple occupation (HMOs) to worry about the future by abolishing section 21 evictions. Then there is the cost-of-living crisis, which means many landlords are facing rising mortgage rates at the same time as uncertainty over rental income is increasing.
The result of the changes over the past few years has been a fall of nearly 50% in the number of properties available to rent. Propertymark reports that approximately 30 properties were available to rent per estate agent branch in March 2019, whereas by March 2022 that figure had dropped to just 15.6. In London the figures are even more dramatic, with Chestersons reporting a drop of 38% in the number of available rental properties between July 2021 and July 2022, while tenant enquiries increased by 60% over the same period.
From the renters’ perspective, the diminishing number of landlords is making for fierce competition when it comes to finding somewhere to live. According to UK rental guarantor service Housing Hand, this is leading to heightened inequality in the rental sector, with tenants who can offer to pay rent upfront gaining a distinct advantage when it comes to securing their desired property.
All this comes at a time when the Centre for Economics & Business Research projects that 407,000 families – equating to nearly one in ten tenant households in England – will fall into rent arrears this year as the cost-of-living crisis continues to ratchet up the pressure. That’s a 31% increase compared to the number of households who got behind on their rent during the first year of the pandemic.
“At a time when the private rented sector is facing threats to its longevity from multiple directions, it is important that we do all we can to support both landlords and tenants. The private rented sector is a valuable resource that needs careful attention if we are to preserve it. This is why services such as pre-validation checks and rental guarantor services are so important.”
Graham Hayward, Chief Operating Officer, Housing Hand
