By: Colin Campbell
With Christmas bunting turning many of the homes across Britain into grottos fit for Santa’s arrival, for the adults, thoughts at this time of year often turn to the following week and New Year’s Eve. Some of you may consider spending the evening in the fountain at Trafalgar Square or stumbling over the words to ‘auld lang sine’ surrounded by strangers having spent an extortionate amount of money on ‘entrance fees’ and drink.
I prefer the ‘go to bed early and start the New Year with a hearty breakfast method’ myself. No ‘White Heather Club’ for me this year! (Ask you parents). But on the 1st of January the question for us will be, can the private rental sector look forward to a ‘Happy New Year’? And in the light of the austerity measures erm… spending review what does the future hold for landlords?
We at the Legal4Landlords blog have tried over the past few months to present the glitter with the grit in terms of news for landlords and the private rental sector. The industry faces more than snowstorms in the coming weeks and months as the true extent of the cost cutting begins to filter into the wider areas of society. So first let’s look at the positives.
In the short to medium term the private rental sector with over 3 million households and rising and tenant demand increasing due to a migration across from the social sector, and rents having increased by over 13% since last New Year’s Eve, this industry is only going to go one way and that is up. Letting agents are expanding their business’ to cope with the increased demand. The nation, not by choice, but through lack of affordable mortgage products and financial clout is evolving into ‘Rental Britain’. The private rental sector is seen as a strong investment and the conditions are right for landlords wishing to increase their portfolios. Happy days!
Well that’s the glitter, now for the grit. The spending review and policies in relation to social housing create demand and also pressure. The impact on society of such swingeing cuts, which we have yet to feel the full extent of, will impact on the spending power of landlords and tenants alike. Those whom migrate from social housing into private rental will be from some of the most vulnerable sections of society in terms of feeling the cuts. For anyone who may have been in that position, paying the rent can become a burden you no longer wish to bear.
Cuts and closures proposed to English and Welsh court rooms will impact on a vital part of a landlords business and has seen the RLA (Residential Landlords Association) deliver a petition to Downing Street asking the government to reconsider. A viable and efficient legal system is essential to the running of the private rental sector.
Landlords will be faced on a daily basis with the social and economic fallout from the recession and spending review. The next decade though may create a new phrase, ‘an Englishman’s home is a buy to let’. Ok, that may not catch on just yet, but remember you heard it here first.