What happened this month and why it mattered: June
Top news stories from June and what they mean for the lettings sector.
Tenant Fee Ban
After several push backs the highly anticipated Tenant Fee Ban came into full effect this month. And as predicted in the first few weeks under the new legislation, we have seen agents beginning to urge landlords to increase their rents to cover the increased costs they will now be passing on to them. Which already puts in to question the “£192m” that renters stood to save as a result of the ban, which was meant to make renting more affordable for tenants by reducing the outset costs of tenancy.
In recent years we have seen former buy-to-let property investors exiting the market and it seems even more will do so in the future. While this may not be entirely the fault of the recently implemented ban, it does have the impact of reducing the supply of rental property and/or competition amongst landlords.
It is evident that the ban has already impacted the market, fees to landlords are increasing, rents will closely follow and its likely that the tenant will end up bearing the brunt.
The political climate
The battle to fill the role as prime minister has now commenced with Boris Johnson going head-to-head with Jeremy Hunt.
There is pressure being put onto the two conservative candidates to make a public commitment to abolish the controversial Right to Rent scheme, which forces landlords to undertake immigration checks on prospective tenants.
A coalition of organisations made up of the Joint Council for the Welfare of Immigrants, the Residential Landlords Association and the 3million, which represents EU citizens in the UK, have united to call on both the candidates to scrap the policy meaning private landlords would no longer be threatened with potential imprisonment of up to five years if they have “reasonable cause to believe” that their property is occupied by someone who does not have the right to rent in the UK.
Whilst it might be a game of wait and see for landlords and agents, there are certainly prospective plans directly impacting the sector. Boris Johnson’s tax plan, were it come into effect, will benefit landlords twice as much as anyone else. Mansfield chief executive Gev Lynott says “In an indirect way, it could also be a benefit for tenants as it would relieve some of the financial pressure on landlords which hopefully means a lower rent increase than might otherwise occur without this boost to income tax relief.”
And While focus might be on the resignation of Thresa May, Brexit and the Tories, chatter in the industry has also been about what Labour might mean for the private rental sector. These include in-principle backing for the various measures introduced in recent years by the Conservatives plus some form of rent controls – possibly locally determined and focused on urban areas rather than across the entire country.
What’s coming up?
With the fall in the UK pound since Brexit, meaning people get less for their money abroad, it has encouraged more people to opt for staycations. And although we may still be impatiently waiting for the heatwave to arrive, London is set to see an insurgence of holidaymakers arriving this summer, come rain or shine. Although it has been common knowledge for a while that owning a holiday let can be advantageous, what a better time for buy-to-let landlords to cash-in on a lucrative additional income.
Let us assist you
If you are in need of a property inventory clerk to support your lettings business in July then please get in touch. We can manage inventories, check in and check out services as well as interim inspections.