Inventory Clerk boss laments lack of new landlords
Inventory companies, energy assessors, maintenance firms and letting agents are all feeling the pinch due to landlords being pushed out of the sector.
That’s according to Daniel Evans, chair of the Association of Independent Inventory Clerks, who blamed rapid rent rises on the lack of available housing stock in the sector.
Evans said: “We all know that tenants are struggling with record rent rises.
“But every single company that supplies the sector is going to struggle because too many landlords are leaving or have already left, and nobody knows where the new landlords are going to come from.
“Whether it’s inventory companies, energy assessors, maintenance firms or letting agents, themselves, the whole sector is going to struggle unless the government can change tack and begin to attract new landlords with more properties to rent.
“Nobody knows how many landlords have left or are about to leave. One large firm of accountants, analysing HMRC data reckoned 70,000 landlords exited the PRS in 2022 and it looks as though the situation is getting worse.”
Evans blames changes in tax law, tenant-friendly proposals in the government’s new Renters (Reform) Bill and incoming energy efficiency regulations for creating the perfect storm in the rental market.
Since April 2020, all buy to let landlords have had to pay tax on all their rental income, although they do receive a tax credit worth 20% of their mortgage interest payments.
This has had the biggest impact, according to Evans.
He added: “The first thing the government should do is U-turn on that tax policy. Landlords should be able to offset all their mortgage costs against tax.
“The new rules mean that landlords who pay higher rate tax have had to pay substantially more and some who were in the lower band have been pushed into paying the higher rate.
“Profits have been squeezed for many landlords and high tax rates aren’t going to attract new ones.”
The elimination of Section 21 evictions will cost letting agents an estimated £278.7m over 10 years, because fewer tenants will be moving.
Another government measure is the proposed change to the Minimum Energy Efficiency Standards (MEES) Regulations designed to introduce an Energy Performance Certificate rating of ‘C’ for all PRS homes by 2028 – although Housing Secretary, Michael Gove, has recently queried whether this deadline is realistic.
Evans supported the policy, but said the government should offer more financial support to achieve these targets.