Tax changes and increasing regulation could lead to a significant increase in the number of landlords exiting the private rented sector, Propertymark; the professional body for the property sector has stated.
The trade body suggests that without a support package for tackling Covid-induced tenant debt and a reformed court system, landlords could well be seen leaving the sector which has already been troubled during recent years due to the impact of the Covid-19 outbreak.
Their research shows that 20% of landlords are thinking about selling some, or all their property portfolios in the next 12 months. The reasons for this include moving goal posts, tax implications, tenant debt and a backlog in the courts so that many smaller portfolio landlords are being left with little option but to consider selling.
For many buy-to-let landlords, income from rent makes up a significant proportion of their total gross income, making them vulnerable when their tenants build up rent arrears. With the pandemic, the effect on landlords has been significant with official government figures suggesting the number of private renters that have been in arrears has more than tripled during the last 18 months when the UK was hit hard by the effects of Coronavirus. Propertymark warns that if the upward trend in this data continues, the number of renters in arears could reach almost 800,000 by the end of 2021. Not good news for landlords.
Mark Hayward, from Propertymark commented:
“We are urging the UK government to look at the bigger picture here. It’s not about propping up landlords but more about doing the right thing for the country as we work to build back better from the devastating effects of the pandemic.
“Ultimately the housing system needs to work for everyone, but landlords are being asked to carry too much of the financial burden caused by the pandemic. We are risking good landlords leaving the market.
“The private rented sector supports five million households in the UK and is an important provider of homes against a backdrop of an overwhelmed social housing system.
“However, at the moment, the risks associated with being a landlord are incredibly high and the financial help for tenants and landlords struggling under the weight of accumulated Covid-related debt is inadequate.”
It’s clear that an exodus of landlords would be very damaging for the housing system, including the many individuals who rely on the PRS to meet their housing needs.
The team at Sinclair Taylor can assist in tracing and recovering monies from tenants who are in arrears with their rent via our Absconded tenant tracing and Former tenant debt services. Speak to us for more information.
