LANDLORD TIMES
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November 2024
THE BUDGET'S BITTER BLOW
Landlords and tenants have been dealt a bitter blow by chancellor Rachel Reeves MP with a hike in stamp duty (SDLT) in the budget.
The increase for those buying second homes, residential buyto-let properties or companies buying residential property in England and Northern Ireland, went from 3% to 5% and took effect on October 31.
While it is designed to discourage those from buying a second home, it could also discourage landlords from expanding their portfolios thus reducing the availability of rental properties and pushing up rents.
However, CGT, the tax on profits made from the sale of particular assets including property, will remain the same at 18% and 24% for higher tax rate payers.
It means it will be harder for people to buy up housing as an investment but not to sell it and so any rental homes which are put up for sale could help first time buyers get on the housing ladder.
The measures were part of £40 billion worth of tax rises on
businesses and the rich which the chancellor said would stabilise the public finances, get the economy growing and rebuild public services.
However for the private rental sector the rise in SDLT will hit landlords hard and reduce further the supply of muchneeded private rental stock, impacting tenants.
Sheldon Bosley Knight’s associate director Nik Kyriacou said: “The new stamp duty surcharge on second homes and buy-to-let investments is bad news for the private rental sector because although this may seem bad news for landlords, it is actually terrible news for tenants.
“Raising the rate of SDLT for second homes from 3% to 5% is a large increase, enough to stop investors buying by strangling their
“This will directly impact one very important element – stock!
“There will be fewer available rental properties coming to the market and this will make it more difficult for tenants to find homes and may cause rental prices to increase as a consequence.
“In terms of the chancellor’s decision not to increase capital gains tax for residential property,
this sadly could incentivise landlords to sell their portfolios, again reducing the already dwindling stock levels.
“We need to keep as many landlords as possible in the private rental sector to enable renters to have a roof over their heads and prevent rents becoming unaffordable. I am not sure this budget will do this.”
“We need to keep as many landlords as possible in the private rental sector to enable renters to have a roof over their heads and prevent rents becoming unaffordable. I am not sure this budget will do this.”
Private rented sector to play role in government’s bid to end homelessness
A new partnership aims to explore and develop ideas for how the private rented sector (PRS) can contribute to ending homelessness in the UK.
The TDS Group, the tenancy deposit and dispute resolution service provider and homelessness charity, Crisis have joined forces for the three-year project.
It comes as official figures show that across England between January and March this year 86,520 households asked their local council for help regarding homelessness and were deemed eligible for support. This is the highest since 2018 when the Homelessness Reduction Act was introduced.
At the end of March this year, 117,450 households were in temporary accommodation, up 12% on the same time last year. Of these, 17,750 were living in bed and breakfast accommodation, a 30% year-on-year increase.
Amidst a shortage of homes for social rent, the 2011 Localism Act gave councils the power to discharge their housing duty to homeless applicants by offering private rented accommodation. However, according to Crisis, 97% of councils said over the last year it had become more difficult to source private rentals for households experiencing or at risk of homelessness.
The partnership will include TDS Group funding to support specialist staff at six Crisis Skylight centres across the country to work with landlords and those facing homelessness to improve access to rental housing and ensure tenancy sustainability. It will also help people experiencing homelessness with the costs of setting up a home in the private rented sector. This will include TDS providing money to help with deposits, buy new furniture and, if necessary, to help with the cost of travel to view properties.
It will also undertake research and develop evidence to inform policy makers on the best way to support those who are, or are at risk of homelessness, to access the private rented sector.
TDS Group head of policy and research, Dr Jennifer Harris said as the partnership was in its early stages it wasn’t possible to put a figure on the exact number of people who could be supported. However she said the PRS could play an important role.
She said: “For all the challenges it faces, the private rented sector can play an important and positive role in helping to achieve this mission.
“Working with Crisis, landlords and those who face homelessness, we will build the evidence needed to demonstrate how best to improve access to stable, secure and decent rented housing for those most in need.”
Renting becoming a lifestyle choice
Attitudes to renting are changing with it being less a stepping stone towards home ownership and more a lifestyle choice.
This is one of the findings in the latest Household Money Index published by Moneysupermarket. com, part of the MONY Group. The research suggests a cultural shift has taken place over the last 20 years with more people renting and for longer. In the 1990s more than 70% of properties in the UK were owner occupied, but today the figure is just 59%.
Renting can give people flexibility for work, education, or family needs, or the chance to try a new area without being tied to a mortgage.
The Group surveyed a total of 10,000 people across five separate surveys between February and August this year. Among its key findings were that 69% of respondents said renting wasn’t necessarily a route to home ownership, it could be a lifestyle choice. Just under half of the respondents (45%) said as more
people rent for longer, it feels as though there’s less pressure to save for a mortgage and 47% said when it comes to what makes a home, it doesn’t matter if you rent or own. Elsewhere 60% said renting gives more flexibility to explore different locations and lifestyles and nearly seven in 10 would like to see the UK adopt a European style renting model which typically has greater protections for tenants, caps on rent rises and longer tenancies.
The UK’s Build to Rent (BTR) sector has seen rapid expansion to meet the growing demand for high-quality rental properties. It is supported by government policies and regulations, including the Future Homes Standard, which is due to be implemented in 2025. It will require new homes to produce significantly lower carbon emissions and is part of the UK’s broader strategy to reach net zero carbon emissions and improve home energy efficiency, promoting sustainability.
However, despite the fact there are more renters than ever before,
45% said they don't yet have insurance for their possessions. Sheldon Bosley Knight’s lettings manager Josh Jones said: “This data is very interesting and certainly reflects the trends we have been seeing over the last few years.
“For many young people, the flexibility renting offers is very attractive. Post Covid people want more freedom to work from home, to travel and to move around in terms of jobs and thus not be tied to one particular area.
“House prices are also still a factor for a great number of first time buyers and for those who are unable to rely on the bank of mum and dad, renting provides the home they need.
“Sadly we are still seeing an imbalance between demand and supply and we need more investors to come into the market. If any of our landlords are considering expanding their portfolios, please get in touch as we would be delighted to help.”
NRLA chief warns government about lack of confidence amongst landlords
A cross-party group of MPs has been warned landlord confidence is so low it could have a catastrophic impact on the supply of private rental homes.
Speaking at the committee hearing of the Renters’ Rights Bill, NRLA chief executive Ben Beadle called for various changes to be made to ensure landlords did not leave the sector.
He told the MPs, who are scrutinising the details of the proposed legislation, the country’s County Courts system was “on its knees” and needs significant reform if it is to cope after the Bill is passed.
He said: “We have been tracking sentiment of our members for the last 12 years and it’s at a record low, with only about 10% of landlords actively looking to invest and around a third looking to dispose of properties or exit the sector completely.
“We can see this in the significant number of sections 21s being used where the reason is the landlord is selling.”
Following its second reading in the Commons, the session was part of the committee stage of the Bill’s progression through Parliament, in which interested parties give evidence on its likely impact and are quizzed by MPs.
Mr Beadle was asked about current rent levels and whether they were fair and affordable. Although he said the increases to September are “high”, he said
a lack of stock and a lack of properties coming to the rental sector was behind the increases and warned the Bill would only make things worse.
He said: “It can’t be normal that 21 people are competing for each property to let… the market is not normal, and issues are not going to be resolved by this Bill.
“There’s lots of good stuff, but it tinkers round the edges of the fundamental issue here which is supply … We need a vibrant private rented sector.”
Mr Beadle said court reform was vital to ensure landlords can take back possession of their homes in legitimate circumstances.
He also called for the reinstatement of the effective sixmonth notice period included in the previous government’s Renters (Rights) Bill, which would be fairer to landlords, prevent homes from being easily moved into the short term lets market and would support student landlords.
Lettings manager Josh Jones said: “These are exactly the points we have been urging MPs of all parties to listen to and take note of.
“Whilst there are many elements of the Bill which we would support, there are some, highlighted above, which have the potential to decimate the private rental sector. This will have dire consequences for the very people the government says it wants to protect – the tenants.
“The government must listen
to these legitimate concerns and make the Bill fair for both landlords and tenants.
“We will continue to lobby our MPs to get the best deal for both our landlords and their tenants.”
The UK Build to Rent (BTR) sector saw robust growth in Q3 2024, attracting £800 million in investment.
Single Family Housing (SFH) led the way, representing a record 50.4% of total investment.
The figures, from Savills’ latest UK Build to Rent Market Update, suggest the surge in investment is being fuelled by both bulk and single site transactions.
Bulk deal investments reached £1.2 billion in the year to Q3 2024, with single site schemes also showing significant growth, rising from £0.27 billion to £1.2 billion.
Institutions, such as John Lewis Partnership, are taking the opportunity to enter the market as a result of slowing sales rates to homeowners and buy-to-let investors.
House builders have restructured their business models and formed Private Rented Sector (PRS) partnerships, demonstrating a long term commitment to SFH.
Savills points to a shrinking construction pipeline, down by 20% in the last year, coupled with signs of contraction in the wider private rented sector, which highlights the urgent need for continued investment.
It adds BTR investment is essential to replace lost rental supply with high-quality, efficient homes and says local authorities must take a proactive approach with BTR as partnerships between investors and housebuilders are crucial for future growth.
Sheldon Bosley Knight’s director
of lettings Rebecca Dean said: “BTR represents an ideal opportunity to help re-balance the supply and demand issues we have seen increasing over the last few years.
“Last year we saw firms such as John Lewis Partnership enter the BTR sector which is great news as
Supporting landlords
The Renters’ Rights Bill was one of the key topics up for discussion at an event for buy-to-let investors and others involved in the private rental sector.
Organised and led by the private sector housing teams from both Warwick and Stratford-upon-Avon district councils, the Landlord Forum was attended by more than 100 landlords and managing agents as well as exhibitors such as Propertymark and Davisons Law. It was run in partnership with the National Residential Landlords Association (NRLA) and the local Landlord Steering Group.
The event, at Stratford-upon-Avon racecourse, featured a series of short presentations on a range of
topics including combatting damp and mould, policy and legislation changes and an update on new local licensing arrangements for HMOs.
There was also a chance for landlords to network and ask questions of some of the exhibitors and find out about grants available to boost the energy ratings of their properties.
Sheldon Bosley Knight’s lettings manager Claire Paginton said: “These forums are a really useful way for landlords to find out what is going on locally, grants which may be available to help pay for energy efficiency initiatives and to network.
“Unsurprisingly the Renters’
it shows there is confidence in the private rental market.
“This, alongside the figures from Savills, should bring some additional comfort to private sector landlords and I hope inspire them to keep hold of their investments.”
Rights Bill featured strongly as it is currently making its way through Parliament. Landlords and managing agents had plenty of questions about how the proposals will be implemented and what it will mean for them and their tenants.
“It was also very useful to find out more about the local legislation surrounding HMO licences.
“Next year’s event is already being planned and I hope as many of our landlords as possible can attend.”
The next Landlord Forum takes place at the SYDNI Centre in Leamington Spa on Wednesday, May 14, 2025 between 12.30 and 4pm. To register email Balwant.rai@warwickdc.gov.uk
Being legally prepared
The Tenancy Agreement Clinic was one of the most popular elements of the Landlord Forum. Solicitors from Davisons Law were on hand for landlords and letting agents to ask questions about tenancy agreements and legislative changes.
Unsurprisingly, solicitor Lisa Shocker said the Renters’ Rights Bill proved to be the issue uppermost in landlords’ minds and there were plenty of questions surrounding the proposed legislation.
She said: “My colleague Saajan and I found a lot of the questions we were asked were surrounding uncertainties in the Renters’ Right Bill – such as rent increase, evicting tenants, how AST should be drafted or how fast the
changes would come in.
“I found myself trying to reassure landlords that no matter what changes come in, which at present are uncertain, there will be a transition period which will allow landlords and their agents enough time to be complaint with the new changes.”
“I found myself trying to reassure landlords that no matter what changes come in, which at present are uncertain, there will be a transition period which will allow landlords and their agents enough
time to be complaint with the new changes.”
She added there could well be amendments to the Bill as it travels through the various stages in Parliament before it reaches the statute books.
She said: “We advised landlords not to panic. There is still a lot of uncertainty, but it was good to hear from the speaker from the NRLA. Her presentation which included information about how the NRLA lobbied MPs at the committee stage of the Bill, provided some reassurance the Bill is heading in the right direction and there is some positive progression, albeit not everyone will be happy with the outcome.”
Getting to grips with damp and mould
The issue of damp and mould is the number one complaint made by tenants during a tenancy.
Emily Kelly head of property management at Tara & Co said as well as being a key issue for tenants, it was now one which the government was keen to ensure was tackled head on.
Speaking at the Landlord Forum, Ms Kelly reminded delegates of the government’s intention to extend Awaab’s Law to the private rental sector and what it would mean.
She said: “The issue of damp and mould is a category one hazard and can be caused by maintenance issues and not always as a result of the tenant’s lifestyle.
“It can be caused by condensation and lack of ventilation and if it’s not treated immediately, it can cause health problems such as respiratory illnesses such as asthma.
“It’s something more people are aware of and raising more as an issue so landlords need to be mindful of it.”
Ms Kelly said as we head into the winter months with colder, wetter conditions, landlords needed to make sure they were on top of any maintenance issues in their properties to stop damp and mould occurring.
She said: “For landlords they have an obligation to make sure homes are fit for human habitation. But tenants need to raise any issues
as and when they arise and action needs to be taken when it’s reported. Inspections are a great way to keep on top of things.”
She said tenants need to be aware of their obligations to treat the property well, reduce the risk of mould and damp by ventilating the property properly, wipe down condensation from windows, not dry clothes on the radiators, not push furniture up against the walls so air can circulate and report any incidents as and when they arise. They should also allow access to the property for the problem to be fixed.
Landlords in turn need to respond promptly and sensitively and update the tenants once the job has been fixed.
NRLA fighting for landlords
Landlord groups are continuing to fight for a better deal for buyto-let investors as the Renters’ Rights Bill makes its way through Parliament.
Eleanor Bateman, senior public affairs officer at the NRLA told delegates at the Landlord Forum it was committed to working hard and press the government to make the changes it feels are needed to make the Renters’ Rights Bill fair for both landlords and tenants.
She said: “We did a lot of work on the Renters’ Reform Bill and feel we made considerable progress, so it’s disappointing to be back at square one again.
“We have got a huge amount of evidence and compelling arguments to try and shape this new Bill and get the best possible
outcome for landlords and tenants but there is a considerable way to go.”
She reminded delegates about the proposed changes to the Bill from the previous one, including the abolition of fixed term tenancies, the abolishment of S21s, the introduction of Awaab’s law and the Decent Homes Standard, the establishment of a landlord database and a ban on the discrimination of tenants in receipt of benefits.
Speaking on the day the NRLA chief executive Ben Beadle was addressing the committee scrutinising the Bill, Ms Bateman said: “In terms of the database, are cautious about what data will be held and whether it will be GDPR compliant. We don’t have the
detail on that yet.
“We are meeting MPs regularly and our CEO gave evidence at the committee this morning. He made the case for court reform and challenged the MPs on all the pertinent issues.
“We are meeting new and old MPs to talk to them about the challenges we are facing and having as many briefings as possible. The speed this is going through at the moment means the Bill could be done by the end of the year so it’s important we keep lobbying.”
She urged landlords to use the toolkit on the NRLA website www.nrla.org.uk/campaigns/ write-to-my-mp to help with the campaign.
• Development with two six-bedroom apartments, four four-bedroom apartments and two three-bedroom apartments
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• Excellent location for Warwick and Coventry Universities
• Current rent value of £243,480 pa, potentially rising to £257,400 pa
• Tenants in situ
• EPC - B Current gross yield of 9.7% £2,500,000
• Two-bedroom mid-terraced house
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• Current rent value of £850 pcm
• Vacant Possession
• No upward chain
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Gross yield of
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Humber Avenue, Coventry
Coach House Court, Loughborough
Bridgefoot Quay, Stratford-upon-Avon
• Two-bedroom retirement apartment
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Drive,
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• EPC - C
Court, Alcester Road
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• No upward chain
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Gross yield of 6.9% £165,000
• Potential rental value of £900-£950 pcm
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• EPC - B
Gross yield of 6.3% £180,000
Brookfield
Rosemary
Banbury
The Hawthorn apartments
The Hawthorn apartments
Sheldon Bosley Knight is delighted to offer an off-market, exclusive opportunity of either individual plots or multiple unit discounted packages from developer Taylor Wimpey.
Ranging from one-bed apartments at 525 sq ft to executive five-bedroom detached houses at 1,986 sq ft, there is plenty to suit your investment needs.
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• Two-bedroom end terraced house
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• A charming and characterful terraced home
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• Current rent value of £825 pcm
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High
Pershore
• HMO licence, recently used as student let
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Pevensey Road, Loughborough Gross yield of 7.4% £290,000 SOLD
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Harcourt Estate, Harborough Road Gross yield of 4.2% £365,000
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Haven Lodge
> Development of 35 studio apartments
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Warwick Row, Coventry Gross yield of 8.2% £600,000
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