How the government can stop landlords selling up
Our new Renting Done Right manifesto highlights what the government could do to help keep landlords in the sector - and it's not all about financial incentives.
We've been on quite a journey in the past few months. Goodlord instigated writing an open letter to the government back in November 2022, to demand recognition of the unsustainable pressures in the industry driving rent increases.
This gained traction beyond our expectations, as over 1,000 industry representatives added their names alongside ours. It led to the launch of our Renting Done Right manifesto last week, taking into account views and insights from across all industry stakeholders.
A need for action
The report highlighted that government policy over the last eight years has exacerbated trends that are leading to an exodus of landlords from the sector.
There are many reasons for this, but it all stems from raising taxes on property income, enhanced compliance obligations for HMOs, increased maintenance costs, the pressure of upgrading homes’ energy efficiency standards, and more.
I've seen this situation evolve across my 15 years' experience in the property industry, immersed as I have been in the regulatory landscape that is so omnipresent in lettings. And we're now at a critical point of no return.
The combined expertise of the industry
Solutions are therefore needed - and from all corners of the industry, not simply based on the opinion of one of the affected parties.
We therefore gathered data through focus groups with landlords, letting agents, and tenants. These were particularly insightful as they revealed so much more than a metrics survey - and revealed a lot of things we hadn’t even considered.
We analysed trends within our rental data, looking at void periods - how long a property is left vacant for between tenancies - and analysed increasing rent prices.
Once we waded through all of the detail, we realised that everything came under three simple headings - three requirements that could help stop landlords selling up, rebalance the sector, and bring rents back under control.
More support, more consistency, and more incentives.
What's needed to stem supply leaks
Our research discovered that it isn’t all about financial support. Landlords need more than that to have a reason to stay.
The support needed is about ensuring the supply of housing, encouraging the growth of the build-to-rent sector, providing more flexibility to tenants, and profiling and shouting about what support is available - whether for EPC upgrades or cladding.
We want the government to set new house building targets. For many years, they haven’t hit the 300,000 houses per year target. In fact, it’s advisory. I don't have "advisory" or "aspirational" quarterly or annual targets in my role and business - why should the government?
Meanwhile, more consistency would help the industry overcome obstacles such as confusion over legislation. This means more simplicity in compliance guidelines. It means a clearer delineation and definition of “social” and “private” rented properties.
And more incentives. For tenants, reassessing credit ratings would go a long way. For landlords, many that we spoke to actually do care, deeply, about their properties and their tenants. However, the reputation of landlords is hard to ignore. Many felt demonised and stigmatised by the publicity of rogue landlords.
Offering incentives will help retain those landlords that have felt shunned by the progressively restrictive legal demands. It would show that the government supports their efforts to offer tenants a home.
There is hope on the horizon. The open letter and manifesto are simply an opening salvo, bringing together the voices of the industry to encourage more recognition around the issues the sector faces.
We need to keep talking about these solutions and this research - and those of others, such as the NRLA and Propertymark - and creating that noise. That's the best way to ensure the government is aware of the challenges - and the best solutions - for the industry going forwards.