Why is there a shortage of property to rent?

[TwinklingFairyLightz]

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?

The manifesto promise to finish s21 has meant a huge increase in risk.

The other promise to ensure all rentals meet an epc of at least C means many older properties will not be financially viable. I.e. the cost to bring them with huge difficulties up to a C.

That along with what happened during covid of no evictions was a green light for some not to pay rent also changed the risk.

Plus only being able to claim 20% tax relief, increases in CGT, electrical safety certificates, and huge court backlogs for possession proceedings.

Increases in costs of repair, plumbers and painters etc has also reduced revenue.

Interest rates increasing has also hit profits for those with mortgages.

Landlords have the greater part of the risk now, so are selling up, leading to a dearth in properties which has in turn increased the rent for those remaining.

I forgot to mention HMO regs and licensing has also meant many LL getting out.

So is the flat now empty?

@TwinklingFairyLightz no it’s no empty or mine, I sold it when I eventually got the guy out.

They are about to overhaul the letting legislation making it much less favourable for landlords. There has been a huge amount of landlords evicting tenants and selling up.

The government wanted to give renters more rights but inadvertently has reduced the letting market so prices will be forced up.

They had not thought that one through.

Agree it's changes in legislation and the problems during Covid.

We had a tenant ( single, male, healthy) that took two years to evict owing £27,000 because of the changes in the law during Covid. We're worried about the changes to s21 and selling.

Ol

This.
Who is the 'they' in your last sentence - the Government or renters? Actually, I'll answer that myself - it's both!

Property always swings from one extreme to the other. It's what it does.

I thought the new legislation was getting rid of no-fault evictions BUT making it easier to evict for non-payment or antisocial behaviour etc.

We'll be selling up due to the changes in EPC legislation - as a PP said, it's pretty much impossible to get a Victorian terrace up to a C.

To answer the OP I imagine it varies a lot by area? Renting has been hideous in London for years. In other areas it definitely seems to be the second home/AirBNB effect.

I wish they would ban AirBNB like some places have. It destroys neighbourhoods and now it gouges everyone with fees. It was a good idea to start with but has become something really horrible.

The population is increasing much faster than the housing stock.

Illegal migration has tripled over the past 4 years, while the government is falling well behind on building (thanks to the rocketing cost of materials and labour shortages).

I'm not sure that this is true since there has also been a huge shortage in property to buy. This isn't a shortage that is specific to the rental market.

As far as I understand it it will ban no fault evictions and set expectations for homes to be of a decent standard. How it will be policed I don’t know. I think they are also new rules for housing associations which I welcome, I feel like they get away with a lot standards wise.

I know landlords will start moaning about the restrictions on THEIR assets which honestly I roll my eyes at. When you invest in residential property it is someone’s home. It’s not like buying and selling shares. You have so much control over people’s lives there should be restrictions.

My concern is more landlords will sell because they can’t be bothered to be a decent landlord or want a better risk/reward, and with the government not funding social housing there will be a shortage of affordable, decent, secure homes. Long term however I would like to see more restrictions on private letting a much more investment in social housing.

@MidnightMeltdown - Did you honestly just blame illegal immigrants for this issue?

It's not tax efficient to have a BTL mortgage any more so fewer people willing to be landlords. Harder to make a profit. Tenants will have more security of tenure in the future which will make it more risky.

We are lucky in 1 way because we rent reasonably high end in quite expensive places and so they are never buy to let places- usually owners away abroad or inheritances etc or an odd couple have been large property management companies who went round buying nice 4 bedders that didn't sell and have hung on to them.

Even then though there's been not loads of choice in the right areas as people who have sold are paying over the odds to have them for 6 months or a year for a family, whilst they look to buy.

I sold up my second property (previously lived in by me then rented when I no longer needed it due to moving in with partner) as it was no longer worth the trouble. Poor tenants and lower returns, more worrying rules on landlords, just wasn't worth the stress. I know lots of landlords selling up for similar reasons, others have switched to AirB&B or student lets as it is more profitable.

I would love to see huge swathes of social housing all over 'middle England', unfortunately it's pie in the sky. In the meantime I'll continue renting my properties to my very lovely tenants until it becomes untenable and I can earn more in a different vehicle.

I seriously can't believe the attitudes to landlords. It's the Government who fail to have a comprehensive housing policy. 10 years of Tories and the country is on it's knees. It's not just housing, adult and children's services are failing or failed, police forces in special measures, hospitals failing patients, the criminal justice system on it's knees, homeless on the streets, massive fuel bills to come, children without anything to eat, benefits cut etc etc . . ..

www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/families/bulletins/familiesandhouseholds/2020

In 2020 there were 19.4 million families, an increase of 1.4% on the previous year, with a 7.4% increase over the decade from 2010 to 2020.
There were 2.9 million lone parent families in 2020, which accounts for 14.7% of families in the UK; the proportions ranged from 11.1% in the South East of England to 21.3% in Northern Ireland.
There were an estimated 27.8 million households in the UK in 2020, an increase of 5.9% over the last 10 years.
The number of people living alone in the UK has increased by 4.0% over the last 10 years; in 2020 the proportion of one-person households ranged from 22.8% in London to 33.6% in Scotland and the North East of England.

@Lineala I don’t doubt you are a nice landlord but as you state it’s profit driven for you and you will just sell up and move on when you want to. I am against the idea that someone’s home, something so fundamental to life, should be so under the control of someone else. You can say oh I am fed up of this now I am selling. Your tenants have to potentially uproot their whole lives. The inequality there is huge.

I also love the idea that social housing is pie in the sky. They government built a huge amount after the war, we spent a huge amount propping up the economy through Covid. The government has a way of finding money when it wants to for the things it wants to do.

Landlords have the greater part of the risk now, so are selling up, leading to a dearth in properties which has in turn increased the rent for those remaining.

So why aren't we seeing a sudden increase in houses for sale?

I wonder if the rentals are being turned into various short term let's, as other PP have said.

Lots of family historically in property letting ( yes, good landlords) but the new tax laws have made it hard to make any money at all.

It is not just people pulling out of the market, it is people not going into the market.

@Plumtreebob some people always want to rent though.

also the problem is if you don’t let the market decide then who allocates housing? If you look at the history of socialist regimes it’s a nightmare of god awful uniform apartment blocks. Or Cuba where you have to find someone to swap a house if you want to move. The theory is lovely the practice is very different

I think there needs to be better regular of standards. But that’s not what’s happening. Councils are putting in place all these licencing schemes which are expensive for landlords and there is very little enforcement of actual standards

I think lots of people don’t realise is that the reason why George Osborne (remember that fucker) made the tax change was in part because he wanted to push out small landlords. The rules weren’t meant to apply if you owned over 15 properties and don’t apply to companies. The current vision is “build to rent” - which is basically like the soviet aparemt blocks but with a posh concierge who gives you a coffee and sky high rents. Small landlords are important to maintaining a varied and flexible rental market

I'm not sure, I think it's a mix of increased demand after covid so they are snapped up. That's my experience. 3 in one block out of 6 flats where I own, LLs have sold up to first time buyers.

A lot of people have turned rented homes (or second homes) or inherited homes into furnished holiday lettings (Air BNB etc) to take advantage of the staycations due to covid over the last 3 years where huge numbers of people are holidaying in the UK instead of going abroad.

They'll come back to the market as normal rentals or for sale once people go abroad again in huge numbers as per pre pandemic and the owners who've fleeced tourists for 3 years suddenly find they can't rent them out for enough weeks to pay the costs and make the profit they need.