Thursday 17th October 2019
Committee Chair Raises Concerns About Lack of PRS Legislation in Queens Speech
Yesterday saw MPs continuing debate on the Queen’s Speech.
Of note, the Chair of the HCLG Select Committee, Clive Betts MP, said of the speech:
“The other area that is not mentioned is the private rented sector, but again there seems to be cross-party support from Members on both Front Benches for reform of section 21 provisions to ensure that there cannot be no-fault evictions. Where is the legislation to deal with that and to tackle rogue landlords who abuse the situation and exploit their tenants? It is very disappointing that there is no reference to the private rented sector in the Queen’s Speech. The Secretary of State for Housing, Communities and Local Government will come before the Select Committee in the next couple of weeks. I am sure that we will push him further on that point.”
New Report Shows Savings Average Homeowner Could Make Compared to PRS Tenants
An average homeowner could be better off by £352,500 over the next 30 years compared to the average private renter, the Intermediary Mortgage Lenders Association (IMLA) has found.
IMLA’s latest report, entitled ‘The Intergenerational Divide in the housing and mortgage markets’, showed the average homeowner could expect to save £133,700 when paying a mortgage rather than rent and gain £218,000 of equity from paying the mortgage off.
The report also found that mortgage rates would have to be in excess of 11.5% throughout the life of a loan before owning, with rental payments producing equal expected financial returns.
IMLA has called on the government to commission an independent cost-benefit analysis of the current regulatory regime for mortgages.
This is to assess whether current regulations could be contributing to potential consumer detriment by excluding some consumers from homeownership.
Landlords Selling Up Says Rightmove
Landlords plan to reduce their portfolios despite rents reaching record levels, Rightmove has found.
Almost a quarter of landlords (24%) said they are planning to sell at least one property from their current portfolio.
One in 10 (11%) landlords said they will be selling all of their rental properties.
Meanwhile asking rents outside London are now at an all-time high of £828 per month.
Miles Shipside, commercial director and housing market analyst at Rightmove, said:
“There are a number of forces at play in the current rental market, all leading to record rents for tenants and fewer homes to choose from, yet demand remains strong.
“Worryingly for tenants there are signs that the stock shortage may worsen if some landlords follow through with their plans to sell up, though an increase in plans for build to rent properties may help to fill some of the gap.
“The overall feeling among those landlords who are planning to exit the market is one of frustration with many telling us that the tax changes mean it’s no longer financially attractive to keep their properties.
“Early data seems to point to some of the income lost through the removal of tenant fees being passed on to the tenant in higher rents, but it should still work out cheaper than paying the upfront admin fees as long as stock doesn’t constrict and rents don’t rise too much.
“What we really need now is more properties available to rent. Rising rents may tempt some landlords back in, but momentum is currently to downsize portfolios in spite of the prospect of increasing yields.” Almost a third of landlords (30%) are planning to increase their portfolio, with the majority of those saying that property still delivers better returns than other investments “