What does the general election announcement mean for letting agents and the private rental sector? Read our advice from experts in the lettings industry.
In our latest webinar, William Reeve, CEO at Goodlord, was joined by Chris Norris Policy and Campaigns Director at the NRLA and Ben Stokes, Associates Lettings Director at JNP to discuss where do letting agents and landlords stand in the run-up to the general election.
In this webinar, it is unsurprising that a lot of letting agents were questioning how the latest announcement of the general election would affect the private rental sector.
Here are some key takeaways experts have said in our webinar:
- Will no-fault evictions ever become law?
- Why would rent controls be so harmful to the private rental sector?
- Would the change in government affect landlords selling up?
Will no-fault evictions ever become law?
Chris Norris, Policy and Campaigns Director at the NRLA, states "If there's one thing, there's a political consensus about ending no-fault evictions, it probably also means ending fixed term tenancies".
While there are question marks over what the Conservatives might promise in their upcoming manifestos, there is a chance that they will change their view on this having gone through all of the battles they have internally. We've also got to look at how Labour would also do this.
But Chris says there needs to be a "fairly planned out transition process from the current programme to a new system".
However, Chris has also warned letting agents that if there is a plan to ban Section 21 notices, there needs to be mitigation as letting agents "can operate without section 21, but we need the right grounds to be introduced. And I'm not sure there's a consensus that all of that's necessary across all parties at the moment".
Why would rent controls be so harmful to the private rental sector?
Ben Stokes, Associates Lettings Director at JNP, gave his insight into this question: "I think the fear of rent controls will cause landlords to exit the market. And I think for a letting agent, that's their biggest concern is that if we get rent controls introduced, it's a less favourable option for a landlord and they'll ultimately look to sell".
Ben worries that if there are rent controls introduced into the market, letting agents may worry about how it may affect their business. While the Labour Party has stated that rent controls will not be part of their policy, letting agents need to keep an eye on the political party's manifestos to see what they are promising for the private rental sector.
Ben finalises his point saying "I think there's steps that we can make now as letting agents to try and mitigate the impact on these relevant changes to our business if we'd start thinking about them now".
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Would the change in government affect landlords selling up?
Chris believes that "everything affects the numbers of landlords selling up at the moment. It could be good, bad or indifferent".
However, he believes that what those in the industry shouldn't do is over-invest in politics and instead focus on two driving factors of why landlords are selling up.
"One of the factors is the model of investing in the PRS over the last 20 years has been very cheap finance, very cheap credit. And that's not there at the moment and we're seeing lots of landlords not really making the numbers stack up".
Chris also says that "the other factor is demographics. You know, we have got an ageing landlord population and we've got a generation coming up who look to, who may have looked to inherit that property who aren't very interested, don't really want the hassle."
The possible change in government may not affect why landlords are selling up, and instead, agents need to focus on nurturing the landlords they have currently to make feeling secure within the sector while more change is coming.
