Will Leyland, 15 November 2017
Public opinion, it seems, is very much in favour of providing more protection and rights to tenants. It ties in nicely to a prominent place in public opinion for housing as whole, with house prices continuing to grow out of line with earnings and young renters increasingly unable to press even a fingertip on the housing ladder.
As displayed by the results of this year’s elections, young people and young voters are now, more than ever, keen to have their voices heard and the message is quite clear; they want more rights and action on unaffordable housing.
It is, of course, a nuanced and complicated situation that takes in many different aspects. First of all, the housing market in the UK is one of its strongest assets. At no point is it realistically likely that the market will crash significantly or lower in price to the point that affordability will markedly increase.
Rents, too, will only grow whilst demand stays high and supply remains relatively low; consider that with many of the measures that the government introduce the incentives for smaller buy-to-let (BTL) landlords decreases almost mutually exclusively.
Thirdly, unless the government seeks to take significant action to ensure that earnings grow in line with inflation and the cost of living, then the difference between affordable housing and those on low or middle incomes will only increase.
That’s not to say by any means that improved tenants rights are a bad thing; quite the opposite. Increased rights for tenants means longer tenancies, more stable incomes for landlords and increased relations between the two. Similarly, the vast improvement in letting agents since stricter regulations have been introduced has been a large factor, meaning that things such as maintenance are dealt with quickly and effectively and that busy landlords have a point of contact for tenants that allows them to feel secure.
What measures might we see in the near future? What will be their impact? Finally, how do they compare to current measures?
The most significant measure that will be introduced is the banning of lettings agents fees, which we have covered previously, but it’s worth commenting on this again as commentary gives mixed messages.
Ultimately, it will provide a better experience for tenants who, when looking to move into rental properties, are often faced with the prospect of paying hundreds, if not thousands, of pounds. Why would this benefit a landlord, though? Essentially it boils down to quality; if you’ve got tenants that move regularly but have slightly more spare cash it’s quite possible they’re holding off better quality tenants looking at a longer-term arrangement. If it increases the competition of applicants for property then, ultimately, landlords can afford to choose the best tenants to suit their needs.
Further measures that we may well see are increased safety measures following tragedies such as the Grenfell fire, in which fire safety has come under the microscope.
This shouldn’t concern the majority of landlords who are ensuring that fire and tenant safety are of paramount importance as a matter of course and, in fact, is likely again to increase the quality of tenant by giving reassurances surrounding safety. Let’s not forget that renting is actually quite an attractive prospect for those who may prefer the freedom of a rental agreement rather than the commitment of a mortgage and the legal processes that entails.
Finally, we would advise you to expect technological advances allowing tenants better routes of communication, better methods of negotiating and signing contracts, and better methods of running maintenance. A notoriously difficult sector to implement technology, BTL and letting agencies will very much embrace these advances in the coming years.
Ultimately, whilst right to remain sceptical in the short term, landlords should be reassured that a sector that will only grow as the years advance is being more tightly regulated.
House prices aren’t likely to drop and demand is only likely to increase. In this environment it’s right that reputable and professional landlords can rely on legislation and the law to protect themselves and their tenants.
We’ve all got horror stories but who could argue that the new deposit scheme hasn’t improved the situation when it comes to disputes? Having an impartial regulator in that space has hugely improved matters, and regulations that improve the experience of both sides should be welcomed.
Will Leyland, 15 November 2017