Boris Johnson or Jeremy Hunt will face an immediate crisis in the private rented sector if government doesn’t rethink its plans to impose fresh regulation on the lettings industry.
The warning from the National Landlords Association follows new research that shows that some 86 percent of landlords consider it “very likely” or “likely” that they would exit the private rented sector if the government presses ahead with controversial plans to make it harder to evict tenants who do not pay their rent.
This comes in the wake of separate NLA research that found that landlords are pessimistic about the future, with the proportion rating the prospects of their own lettings business as “very good” or “good” falling from 65 per cent to 37 per cent over the past four years.
According to a survey of NLA members, nearly half (46 percent) of landlords have invested in property in order to substitute or supplement their pensions.
The NLA says many did so after pension saving became a liability following the Labour government’s controversial £10 billion-a-year pension fund “tax grab” and a series of high-profile scandals involving pension schemes such as those of Equitable Life and Robert Maxwell’s Mirror Group.
The association claims there are rising expectations that many landlords will have to sell up in order to fund their pension.
Richard Lambert, NLA chief executive, says: “Many landlords are telling us that the latest changes to the regulations affecting the private rented sector are the last straw.
“These are not the greedy or unscrupulous people that many would have you believe. They became landlords in order to fund their retirement, but they are being backed into a corner because the government’s plans to change the regulations—such as the proposal to abolish Section 21 of the Housing Act—is making it harder and harder for them to generate sufficient income.
“If they are left with no option but to sell their property and exit the private rented sector in order to fund their retirement, then given how many landlords are retired or approaching retirement, the chances are that there will be a sudden and significant shrinkage in the size of the private rented sector. If that happened, it is a racing certainty that the current housing crisis would get worse.”