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Original poster

Why is there a shortage of property to rent?

137 replies

TwinklingFairyLightz · 08/08/2022 12:25

This seems to be a post pandemic phenomenon. Rental prices are increasing due to a shortage in available properties to rent and there are bidding wars on properties that do come up.

Why is there a sudden shortage? Is it demand ie an increase in people looking to rent or supply ie less available properties?

OP posts:
wonderstuff · 08/08/2022 12:30

Not enough houses being built to keep pace with population growth, people buying property for second homes/holiday lets/investment taking property off the market for people wanting a main residence.

wonderstuff · 08/08/2022 12:31

I don’t think it’s sudden, been an issue for years. Possibly made worse since pandemic with people wanting additional space to wfh and demand for uk holiday rentals.

OberthursGrizzledSkipper · 08/08/2022 12:32

Round our way every single house is bought by developers for either student housing or HMOs, leaving nothing to buy or rent for anyone else.

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Cost of living Property
CrappyJob · 08/08/2022 12:34

Where I live, Airbnb has had a profound effect on the rental market.

During lockdown, they were rented out for homes, but now holidays are back on the agenda, they are being let for holidays again.

Onandupw · 08/08/2022 12:36

As above. And they’ve changed the tax deduction laws on buy to let so an entirely predictable outcome is that there are less rental properties. And it often doesn’t work out that it’s a straight switch from someone who would otherwise be renting then buys. Far from it

clarrylove · 08/08/2022 12:38

Possibly more family breakdowns and needing 2 properties instead of one. That seems a lot more common now I think.

Move22 · 08/08/2022 12:38

People are selling and hoping to buy … but not much on the market … therefore having to rent which adds to the renting pool.

FlowerArranger · 08/08/2022 12:42
  1. Letting property has become much less profitable since mortgage interest is no longer tax deductible.
  1. More and more legislation has been introduced which makes being a landlord more cumbersome. The idea was to protect tenants, but in practice unscrupulous landlords continue to ignore legislation and some of the better ones decide that it's no longer worth the hassle.

Hence a lot of investment properties are being sold off.

AtLeastPretendToCare · 08/08/2022 12:44

FlowerArranger · 08/08/2022 12:42

  1. Letting property has become much less profitable since mortgage interest is no longer tax deductible.
  1. More and more legislation has been introduced which makes being a landlord more cumbersome. The idea was to protect tenants, but in practice unscrupulous landlords continue to ignore legislation and some of the better ones decide that it's no longer worth the hassle.

Hence a lot of investment properties are being sold off.

All of this

Wombat27A · 08/08/2022 12:46

Constant abuse of all landlords on social & mainstream media, regardless of how well they do their job.

Poor regulation of shit landlords, poor regulation of buying & selling adding to costs, extra taxes, changes in taxation...

People scared about changes in regulations to EPCs in England.

In Scotland, there has been a registration scheme for several years & more regulation of safety issues. Wales are changing the law on tenants significantly shortly.

For people holding original btl properties as a retirement fund, they are now getting older.

But I do think the unregulated holiday home market must cause distortion to the availability of housing stock. Ditto student accommodation.

It would be interesting to see the statistics. I know a couple of years ago, a quarter of houses in Denbighshire were sold as 2nd homes & that's not even a massive tourist hotspot, except for caravans.

Wombat27A · 08/08/2022 12:47

FlowerArranger · 08/08/2022 12:42

  1. Letting property has become much less profitable since mortgage interest is no longer tax deductible.
  1. More and more legislation has been introduced which makes being a landlord more cumbersome. The idea was to protect tenants, but in practice unscrupulous landlords continue to ignore legislation and some of the better ones decide that it's no longer worth the hassle.

Hence a lot of investment properties are being sold off.

A much better, more succinct precis.

Danikm151 · 08/08/2022 12:50

In my area the rental market is mostly student accommodation or HMOs. Landlords can get £1200 for a house a month splitting the cost between 3 rather than getting £600 a month for one family.

Watchthesunrise · 08/08/2022 12:52

Rental properties are income generating, and the owners use target income thresholds based on the property's value. This is called yield. If property values rise, but rents don't, then yields fall and property looks less profitable. Rents cannot continue to rise if tenants can't afford to pay continuously higher amounts. So tenantable property is sold or converted to higher yield uses (students, Airbnb) and normal tenants are left scrambling.

The other explanation is that people expect a whole house for 1-3 people now. Split parents expect two houses, not one. Old people expect a home of their own. This all creates extra demand for homes.

The solution is more supply. And some subsidisation of supply.

1VY · 08/08/2022 13:07

Lots of “ accidental landlords “ have sold up because they are making very little or no money for the work they do and the capital invested and the risks are too high.

Plumtreebob · 08/08/2022 13:15

If it was landlords selling off portfolios we’d see a corresponding increase of properties for sale which hasn’t happened. I don’t buy the government is making it oh so hard to be a profitable landlord bit.

Where I am it’s Air BnBs, student accommodation and HMOs. Even your ordinary 3 bed semis are being marketed with potential to be an HMO or split up into flats for short term lets. One for sale on my street actually says great Air BnB potential not even short term holiday let, but Air BnB. Definitely not a lack of building where I am either, there is currently over 6,000 flats being built at the same time. I appreciate that’s not the case everywhere though.

IRememberXanadu · 08/08/2022 13:16

FlowerArranger · 08/08/2022 12:42

  1. Letting property has become much less profitable since mortgage interest is no longer tax deductible.
  1. More and more legislation has been introduced which makes being a landlord more cumbersome. The idea was to protect tenants, but in practice unscrupulous landlords continue to ignore legislation and some of the better ones decide that it's no longer worth the hassle.

Hence a lot of investment properties are being sold off.

This!

Plumtreebob · 08/08/2022 13:18

Mortgage interest is still partially deductible just at a lower rate than before.

Original poster
TwinklingFairyLightz · 08/08/2022 13:21

Plumtreebob · 08/08/2022 13:15

If it was landlords selling off portfolios we’d see a corresponding increase of properties for sale which hasn’t happened. I don’t buy the government is making it oh so hard to be a profitable landlord bit.

Where I am it’s Air BnBs, student accommodation and HMOs. Even your ordinary 3 bed semis are being marketed with potential to be an HMO or split up into flats for short term lets. One for sale on my street actually says great Air BnB potential not even short term holiday let, but Air BnB. Definitely not a lack of building where I am either, there is currently over 6,000 flats being built at the same time. I appreciate that’s not the case everywhere though.

Thank you. This makes sense.

I thought it couldn't just be landlords selling because there isn't a huge amount for sale either.

OP posts:
StarDolphins · 08/08/2022 13:23

I rented my flat out for 4 years - had a lovely lady in for 2 then an absolutely horrendous man who totally trashed it & stopp d paying rent but carried on living there. I got no help, felt like he got the far better end of the stick so I sold it.

shame really as i had it pet friendly which is what I feel is needed!

NO WAY was I letting anyone else do that to me.

Original poster
TwinklingFairyLightz · 08/08/2022 13:25

StarDolphins · 08/08/2022 13:23

I rented my flat out for 4 years - had a lovely lady in for 2 then an absolutely horrendous man who totally trashed it & stopp d paying rent but carried on living there. I got no help, felt like he got the far better end of the stick so I sold it.

shame really as i had it pet friendly which is what I feel is needed!

NO WAY was I letting anyone else do that to me.

So is the flat now empty?

OP posts:
sorbetseason · 08/08/2022 13:26

I think all of the above!

I wouldn’t ever buy a buy-to-let because it is considered ethically dubious due to overall housing shortage, the laws and taxation rules are prohibitive and actually I’m not sure if it’s really possible to bring a lot of the typical red brick terrace houses even up to energy efficiency standards required? There’s a lot of housing stock in the U.K. that would need to be emptied, re roofed, and give. new heating systems, new windows and wall insulation whether internal, external or cavity.

But the obvious fall-out is that a lot of not-great-but-alright rental stock is going to just come off the market!

ClaudiaWankleman · 08/08/2022 13:29

FlowerArranger · 08/08/2022 12:42

  1. Letting property has become much less profitable since mortgage interest is no longer tax deductible.
  1. More and more legislation has been introduced which makes being a landlord more cumbersome. The idea was to protect tenants, but in practice unscrupulous landlords continue to ignore legislation and some of the better ones decide that it's no longer worth the hassle.

Hence a lot of investment properties are being sold off.

I don't see this - there isn't a huge flood of previously rented properties on the market.

Decidualcast · 08/08/2022 13:33

I’m looking to buy in London. Most of the properties I’ve viewed are those being sold off by landlords. I’ve seen rooms in shared flats for £1k/mth.

My friend who rents a rather swish mews house in Kensington has been told her rent is going up by 25%!!

Now that life has normalized post-pandemic, people are flocking back to cities to work and study.

Halstead · 08/08/2022 13:34

1VY · 08/08/2022 13:07

Lots of “ accidental landlords “ have sold up because they are making very little or no money for the work they do and the capital invested and the risks are too high.

This is why we’re selling the house we let out after moving out and buying elsewhere.

sorbetseason · 08/08/2022 13:36

I don’t think it’s all HMOs or airbnb near me, there’s not the demand especially as the existing student offering was grim beyond belief and a ton of student dorm style housing (private halls) has been built.

It seems a lot of what’s been happening is that landlords have been selling off dribs and drabs but there is no ‘new clutch’ of landlords buying them up and renting them out. Certainly the only people I know whose own rented homes have had their leases ended, their landlords have gone on to sell the homes.

As a pp said we have gone through a long period of individual people having individual homes but the historical norm was very different - read The Road to Wigan Pier or Down and Out in London and Paris by George Orwell or The L Shaped Room which details 50s bedsit rooms in rundown Fulham (!) with a landlady downstairs.

The landlady owning a big house and letting out rooms with a shared bathroom was a huge part of British culture for years. I’m not sure how the landladies bought the houses in the first place or why the custom died out (I mean it does sound horrendous).

Not suggesting we should go back to the bad old days! Just that peoples expectations have changed. A working class terrace where my mum was born housed her parents, her granny and two siblings. It was tiny! Now would be considered snug for a couple, ideal for a singleton!