Bricknells Letting Agents: "It's not easy being a landlord in the private residential sector"
As a letting agent that has exclusively operated within the PRS for the last 20 years, we have seen significant changes in tax laws and regulation compliance.
Having had the opportunity to contribute to this publication, we feel a need to support landlords by urging the government to support this vital resource in providing safe, affordable housing to those that prefer to rent or cannot aspire to owning their own home.
Let's face it: the reason that landlords venture into the PRS is to make a return on their property investment. That return could come in the form of capital appreciation, yield or a combination of both.
Being a landlord is a business, and like any business it needs to make a profit, otherwise it exits the market.
Market forces of supply and demand will determine rent levels but, in return, properties need to be safe and of a good standard.
The majority of landlords agree that increasing regulations could only be a good thing, but enforcement of compliance with those regulations needs to be consistent so as to professionalise the industry.
The Section 24 tax changes have made it increasingly difficult for the higher-paid taxpayers and landlords to make a profit, and as such we see an increasing number of landlords exiting the market and selling up. Many are not aware of the ambush waiting in the form of the CGT tax changes.
The English housing survey estimates that the PRS accounts for 20 per cent of all the households in the country, and with the shortage and lack of affordability of new houses, the PRS is going to continue to play a big part in providing safe and affordable housing well into the future.
To stimulate continued expansion of the sector, there was a thought that the three per cent stamp duty on second homes might have been abandoned but alas it remains.
However, now everything is secondary to the turmoil that we are facing in respect of the Covid-19 outbreak.
Life will perhaps be measured in terms of before and after the virus; the stock markets are in free fall, pensions have taken a hit, panic buying is starting to grow and there may well be necessary, more draconian measures on the horizon.
Tenants are worried about their ability to pay rent, landlords are concerned about being able to service their mortgages and for us agents, the priority is protecting our staff, instigating remote working and worrying about our income when our tenants are out of work.
The government is fighting on many fronts, and in the short term, it needs to protect tenants from losing their homes.
However, when the virus is beaten, the government needs to learn the lessons and introduce initiatives that protect both good tenants and good landlords. A recent survey (before the coronavirus outbreak) suggested that 48 per cent of landlords are considering divesting their portfolios and leaving the rental sector completely. And that would be a disaster for a post-virus UK that wants to get back to business as normal.
What the new normal will be, well, only time will tell, but let's all hope that it will be a change for the better.