Belvoir is calling for the Chancellor to introduce incentives in November’s Budget to encourage landlords to remain in the sector. It said that in one of its branches, 17 rental households have been given notice because the landlords want to sell up.
The franchise network’s latest data on activity among its letting agents in the second quarter found that 48% of landlords have sold up to three properties, up from 46% in the first three months of this year.
There was also an increase from 7% to 17% in the number of Belvoir landlords selling between six and ten properties between the first and second quarter of this year.
Dorian Gonsalves, chief executive of Belvoir, warned that these exits were as a result of the tax clampdowns on the buy-to-let sector and urged Chancellor Philip Hammond to introduce perks to encourage landlords to remain in the private rented sector (PRS).
He said: “More agents than ever before are reporting that landlords are selling up.
“Although government policies such as a loss of mortgage tax relief and increased Stamp Duty on second homes is hurting landlords, they still have a choice as to how to invest their money, whereas tenants have little or no choice of where to rent due to a reduction in supply.
“Concerns about the possibility of mandatory three-year tenancies may also influence the decision of landlords, and there are real concerns that there could be an increase in homelessness, as there is insufficient social housing to accommodate people.
“We are urging the Government to do more in the Budget to address stock shortages in the UK, by incentivising the new-build sector with low maintenance homes through more Help to Buy and Buy to Rent schemes to provide more homes to own.
“Landlords also need rewards and incentives to encourage them to remain in the PRS, such as reversing current tax increases and introducing tax breaks, as well as initiatives such as tax incentives for landlords who buy large properties and turn them into several affordable and low maintenance flats suitable for the rental sector.”
Belvoir’s data also showed that offices that have traded for more than ten years reported a 1.75% annual increase in rents charged by landlords to £744 a month in the second quarter, while newer offices registered just a 0.75% rise to £782.
Comments (7)
Dorian and Belvoir have been staunch supporters of the Axe the Tenant Tax campaign from the very beginning, and I wish them well on their attack on the treasury morons who do indeed need to reverse all the idiotic attacks on the sector.
But of course, they wont. Latest rumour is that SDLT is going UP for investors at the next budget. There’s no end in sight to the government’s aims to increase homelessness and blame us for ‘causing’ it!
What baffles me most is that Shelter/GR and this supposedly Tory govt think forcing landlords out of business doesn’t affect homelessness! I’ve asked Shelter many times to explain their hypocrisy of wanting us out of the market whilst thing us IN to the market for 3 years at a time, but I’m met with silence. Their policy meetings must be fascinating places to be!!
Exactly what government want to hear but as stated above they won’t take any blame, landlords will get vilified for putting tenants out !
Average tenancy here at our office exceeds 3 years, we either renew annually or run periodic. The introduction of a 3 year tenancy would, in my opinion, be the proverbial straw to break the camel’s back.
Two examples: –
1. This morning, long standing tenants of 3 1/2 years announce that they are splitting up, he’s moved out, she wants to stay with 2 children but zero income so “is going to see the council!” Imagine if those tenants had been in situ 9 months and 3 year agreement existed – landlord would be left with no choice but to allow tenancy to continue, tenants would be tied. Something would give, probably tenant would stop rent payments leaving landlord with arrears, costs and the council giving their normal **** advice. As it stands we can serve notice, not ideal but the process has begun.
2. Tenants have been at one of our properties for 18 months, landlord’s daughter splits up from partner, she needs to find somewhere for her and 3 kids. As it stands we can give notice so that landlord can allow daughter to move in.
Two landlords there that would not “fit” the compulsory 3 year tenancy rules – why would they want to continue? In addition first landlord has just found out that rental income has taken him into income bracket where he gets no tax free allowance so is being whacked for shedloads more tax!
As the tax is stepped it is only going to get worse as the tax becomes greater. All very predictable to everyone but shelter, generation rant, tenants and HM Government.
Its ‘coming home to roost’ – Newton’s 3rd Law, every action has a reaction.
Looks like the Government are going to get a basic lesson at the expense of tenants !
When are so-called Tenant groups going to wake up to the impact Government polices in the sector are having on Tenants ?
Good work by Belvoir in highlighting the issues with a palpable example. This needs to be in the national press. Unfortunately, only a tiny proportion of ‘our’ side of the story gets there though.
But if the national press use this example they’d spin it to something along the line of all these nasty landlords making tenants homeless even though the tenants haven’t done anything wrong. They’d just use it as another big stick to bash landlords with.