The industry is awaiting details of the latest government consultation concerning the private rental sector which will consider longer tenancies.
The consultation was announced in yesterday’s Budget with a hint by Chancellor Phillip Hammond that longer tenancies could be encouraged by tax incentives - but no further details were given.
Now the Department of Communities and Local Government is expected to provide additional information in the coming days.
“The fact that a consultation will now take place should be welcomed. From the landlord’s perspective, it’s better to have the security of knowing your property is let, albeit without a regular percentage increase in the rent, than it is to enjoy five per cent income rises but with the risk of costly void periods. It’s all about looking at the bigger picture and in this instance, that’s your profit and loss account” says James Davis, founder of Upad online lettings agency.
“A certain level of flexibility will need to be employed so that any investor with a loan or loans against his portfolio isn’t penalised by tenancy agreements of longer than three years as this could limit his financing options” he adds.
David Smith, Policy Director for the Residential Landlords Association, was less enthusiastic about how different Budget policies will hit the letting sector.
“With ever growing numbers of families with children in private rented housing we recognise their needs for longer tenancies. The Budget could have acted on proposals we have made by providing tax relief for landlords prepared to do offer longer tenancies and taking action against mortgage lenders who block them being granted. Instead we have yet another consultation adding to the 15 already ongoing which relate to the private rented sector. Tenants cannot live in consultations” he says.
“The renewed focused on corporate money in high rise city centre rental property also neglects rural areas and towns, and fails to support the majority of landlords who are individuals and can provide the dynamism the rental market desperately needs. The value of the private rented sector is its responsiveness and diversity and the Budget does nothing to encourage this” he adds.
Glynis Frew, chief executive of Hunters, says: “We were disappointed that there wasn’t further discussion of increased regulation for the lettings industry, which is crucial in ensuring a more transparent and better functioning industry for tenants, landlords and agents.”
This view was echoed by Iain McKenzie, chief executive of The Guild of Property Professionals, who says: “MPs have raised their concerns about how long it is taking for details to be announced, and lettings agents need to know what is coming and when to expect it. Agents are being held in limbo and we need to know the details.”
Meanwhile Danielle Cullen, managing director of StudentTenant and ClickTenant called the Budget announcements “crippling” for landlords.
“We’re still no more informed on the tenant lettings fee ban, which is also set to increase rental costs for landlords, as many agents have outlined they will have to pass over the costs” she says.