Government BTL Policies Failing PRS
Recent data showing that rents in the UK's private rental sector (PRS) are set to continue rising, while repossession actions are taking on average over six months to complete are being considered as fresh signs that the measures taken by the Government to protect tenants and keep rental costs down, have failed. The Residential Landlords Association (RLA) said that news of further expected rent rises, coupled with additional details including the fact that few people are making use of the Rogue Landlords database, highlight that the Government has made numerous missteps in its attempts to improve the PRS.
As demand for rental homes in the UK continues to rise, the Government put itself forward as a tenants’ champion. It introduced rules that were designed to lower costs for tenants and make the sector more reliable for landlords and tenants. However, the recent raft of news, research and data suggests that so far, those Government measure have failed to have the desired effect. Instead, the RLA suggests that both landlords and tenants are in a worse position than they were previously.
Rents set to keep rising
The latest housing survey from the Royal Institution of Chartered Surveyors (RICS) suggests that after rising for much of the past few years, average UK rents are expected to continue rising over the next two years, as the supply of rental homes is still too low to satisfy growing demand.
The RICS are far from the only body forecasting further rent increases over an extended period, which highlights that tenants’ costs are only going to rise, not fall.
Meanwhile, landlords who are benefitting from higher rents are suffering in other respects. Where a rental property is subject to a repossession order, usually due to unacceptable behaviour by tenants, the landlord and property owner must wait an average of 37.2 weeks from the start of a repossession claim being filed, to gaining possession of their own property.
While this time period has actually decreased from the third quarter of 2019, an average of 6 months to gain possession of your own investment property when the tenant is at fault is still too long. Plans to completely remove the section 21 repossession option.
Few users of rogue landlord database
In addition to the news directly affecting tenants and landlords, another development serves to further highlight that the Government is simply getting letting industry reform wrong.
The Rogue Landlord Database is a case in point. While there are signs that local councils are exerting their increased powers against rogue landlords, the database that was created to highlight those landlords who don’t follow the rules, at some cost, remains largely unused.
The RLA states that there are just 18 individual landlords and property agents along with five companies who are registered on the database, for offences committed since April 2018. Of course, this could be indicative of the low number of rogue landlords operating in the UK. However, it’s likely this is yet another example of a big investment from the Government with little to show in the way of useful results.
“This series of statistics clearly shows the negative impact of government policies. At the end of the day it is tenants who are suffering,” said the RLA policy manager, John Stewart. “Ministers need to change course and instead of attacking the private rented sector, there should be policies and taxation to encourage growth in the supply of rental accommodation to meet the ever-increasing demand.”
With a new housing minister and chancellor now in place it will be interesting to see what, if any further changes are made to the UK’s still growing rental sector.
