But where will tenants live?
Tue, Sep 18, 2018
The balance of renters to homeowners continues to fluctuate with the proportion of renters within the United Kingdom doubling over the past two decades.
Whereas it is probably fair to say the government have acted and attempted to restore the balance in favour of homeownership, the number of people wanting to rent privately is ever increasing, with no sign of slowing.
To date, the government steps taken to encourage home buying have only deterred private landlords with the smaller landlords even being pushed out of the sector entirely. The Royal Institute of Chartered Surveyors (RICS) have found that doing away with mortgage interest tax relief in addition to difficult lending criteria, ever changing and increasing legislations and of course, higher stamp duty have adversely effected the rental stock. So, where will tenants live?
With so many tenants looking for a home and the rental stock actually declining, we are potentially facing a real issue. RICS and ARLA (the Association of Residential Letting Agents) have advised that most of their members have seen an increase in the number of searching tenants whereas their rental stock is not increasing in line with previous years. In fact, over the last two years, the level of rental stock has decreased and now the government face pressure from within the industry to encourage good landlords, big and small to continue to invest.
Abdul Choudhury, RICS policy manager, said: “Withdrawing tax breaks that small landlords relied on, placing an extra 3% on second home stamp duty, and failing to stimulate the corporate build-to-rent market, has understandably [had an impact on] supply.
“The government must urgently look again at the private rented sector as a whole, including ways to encourage good landlords.”
“Ultimately, the government must consider the impact of its policies, and if the wish is to move away from the private rented sector, it must provide a suitable alternative.”
More apprehension is rippling through the industry as it is rumored that there could be another increase in the stamp duty implications for landlords, which would inevitably cause further turmoil that we could do without.
The very reasons tenants elect for tenancies over homeownership are plentiful. For some, it’s an affordability issue with mortgage lending becoming ever more difficult to achieve. For others, the mere lifestyle choice may simply suit, especially for the younger generation who may not have decided where exactly to lay down their roots for the future. Even families now may decide to rent along as they favour the flexibility and minimal responsibilities that benefit tenants today.
In conclusion, the rental sector isn’t going anywhere and the demand for rental properties is higher than ever. Hopefully, the tenants appeal for homes will be heard loud and clear by current landlords and those still looking to invest in the rental market.
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