- as costs continue to rise
Private landlords have reported drops in yield, as their costs rise. According to the National Landlords Association, they have seen income fall by 20% between 2011 and the start of this year. The NLA says that average property prices in that period have risen by over 40%, while average rents have gone up 14.5%.
Chief Executive Officer Richard Lambert said this week: “Providing good quality rented homes is a costly business and getting more costly by the year. Although it is popular to paint private landlords as greedy parasites, only interested in pushing rents as high as they can go, the fact that rents continue to track below inflation, and far behind house price inflation, illustrates that this is far from the case. Being a landlord in the UK remains a worthwhile, and potentially profitable endeavour, but it is not a means of turning a quick profit.”
One landlord, Corin Ashbee-Waugh, has written to the new housing minister, Christopher Pincher, expressing his concerns in no uncertain manner :
“Dear Mr Pincher,
As our new Housing Minister, you need to look seriously at the exodus of landlords from the private rental sector. Fewer landlords means even fewer homes for those who can’t buy.
I am a small portfolio landlord (three rental properties in Surrey). The draconian taxation measures introduced over the last few years (under a Conservative government – 3% additional Stamp Duty and the removal of mortgage tax relief) is having a major negative impact on this sector. If you look at the statistics, it is clear that landlords are selling up in droves. The consequences will be dramatic.
More than two hundred and twenty-two thousand landlords have left the sector since 2017 due to tax and regulatory changes.
If you are in this job for more than a few months and not just coasting until a better one comes along (which is what your predecessors seem to have done) it would be nice to see some real action to deal with this issue.”
Although Wilsons do not handle lettings, we have many clients who rely on rental income for their pension funds and we gather from them that they are feeling the squeeze following a series of punitive taxation measures. There is also a knock-on effect for tenants as landlords increase rents to offset some of their own increased costs.