The only solution is the same one that worked last time round, build a shedload of council housing (like a couple of million of them) anything else like rent controls or landlord licensing is not so much a sticking plaster as trying to stem blood loss with a box of Kleenex on someone who's been shot half a dozen times.
The Tories are ideologically opposed to it and Labour seem to be luke warm at the very best. The private housing sector is evaporating faster than a ice cube on a hotplate so the problem is going to get a LOT worse yet.
Got to admit I quite like this idea which has probably almost certainly killed it stone cold dead. Can't see any of the major parties in this country buying into it, especially the rent is a proportion of your income rather than an absolute figure idea.
True. Lots of landlords are selling up*, so their tenants are being served Section 21 [no fault eviction] Notices. Their tenants are struggling to find anywhere else to live that's affordable, so they're self-referring to Council homeless services and being told to stay put until they're evicted by bailiffs, otherwise they will be deemed to have made themselves homeless. Councils have been advised by the government that they should (in law) be stepping in sooner and that if there's a properly served Section 21 Notice then the tenants shouldn't have to go through the whole eviction process and incur court costs and bailiffs fees, but councils just don't have the capacity to rehouse everyone that needs housing so they're failing to comply with the law.
Reasons why landlords are selling up:
(1) Phasing out of mortgage interest relief, which ended in April 2020. For years and years, landlords used to be able to set off the mortgage interest they paid against their tax bill, but that tax perk was phased out, so landlordism started to be less profitable.
(2) Introduction of landlord/property licensing in some cities. Landlords incurring more costs to comply with the licensing schemes. They might have to spend money upgrading their property to meet requirements too.
(3) Over the years, landlords have had to comply with more and more legal requirements/regulations, iirc, gas safety certificates used to be the main one, but now electric safety certificates, fire safety, energy performance certificates, etc.
Of course, all that is in the tenants' best interests and helps get rid of some of the worst of the slumlords, but it's yet another thing, or multiple things, which have eroded the profit margins.
(3) Landlords fears over the costs of meeting higher energy efficiency standards. A while back, the government announced that all rented property had to be at least EPC C by 2025. Lots of rented property doesn't meet that standard. And in order to being it up to that standard would cost £thousands. When you think of how many rental houses, especially in the north of England, are little terraced houses, which might currently be EPC D, or E or F, lots of landlords started to get spooked by how much it would cost to increase insulation, redo central heating systems, install double-glazing if it wasn't already installed, etc. For lots of properties, the amount of money needed to make those improvements* made landlords decide that those properties weren't financially viable as an ongoing investment.
*Particularly bearing in mind that even owner-occupiers will work out the sums and think hard about the payback period, eg how much it would cost to upgrade (£thousands) versus how much they will save on heating bills (£hundreds), so it's a huge upfront cost that pays off/provides a very slow and low return on investment. But in the case of landlords, they're just incurring the cost, it's their tenants who benefit from lower heating bills. Of course, landlords can then increase the rent for the improved quality of the property, but lots of areas have ceiling prices for market rent, and landlords also bear that in mind as a factor, eg in order to do that energy efficiency work, they'd want/need to then increase the rent to X amount, which is above market rates for the area.
The government has recently backtracked - originally, the requirement was for all new tenancies to be EPC C compliant by 2025 and existing tenancies by 2028. But that's been dropped. But many landlords have already sold up.
(4) Recent mortgage interest rate rises. Lots of landlords are now finding that their rental income isn't covering all their expenses. Or it might just about cover their expenses or might provide a little bit of profit, but the landlords are increasingly thinking the returns aren't worth the effort, receiving phone calls at night or at the weekend because a lightbulb needs changing (it happens more than you'd think) or the tenants have broken something.
A broken boiler or a tenant moving out and them having to decorate and re-carpet and pay fees for new tenancy agreements and reference checks etc etc can pretty much wipe out their 'profit' for the year'.
And this is going to get worse, because lots of landlords are over-leveraged. Years ago, in places like South Manchester, you used to get some landlords who were cash buyers who bought up lots of properties and rented them out to students, often properties in scuzzy states. But as 'Buy-to-Let' became a thing, landlords were buying properties with as little as 25 per cent deposit, so they have substantial mortgages. Whereas the old-style cash buyer is quids in, the Buy-to-let landlord is much more susceptible to being financially squeezed out of the market by a variety of factors, just one bad tenant who stops paying rent (leaving the landlord unable to pay the mortgage with rental income) and/or trashes the place (some tenants cause £thousands of damage), and the mortgage interest rate rises are the straw that broke the camel's back for many.
Many landlords will face getting into mortgage arrears and having their properties repossessed over the next few years.
(5) Going back to the issue of Section 21 'no fault' evictions. Landlords were already pissed off by how long it could take to regain possession of their property, even though the relevant government minister had written to councils telling them to stop telling tenants to wait until the bailiffs turned up.
Then the government announced that it planned to change the law to abolish Section 21 'no fault' evictions. Which horrified landlords, faced with the prospect of not being able to regain possession of their property. There have already been countless cases of eg families renting out their homes while temporarily living elsewhere, perhaps even abroad, for studies or work or while travelling, or while military families are on deployment overseas, only to find themselves homeless on their return, because their tenant refused to move out at the end of their tenancy and making them go through the whole eviction process. Or cases where a couple has got together, they've moved in, and one of them has ended up an 'accidental landlord'... fast forward a few years, the relationship breaks down, they serve a Section 21 Notice on their tenant so that they can move back into their original home, but the tenant's told to stay put by the council.
It can already take 6-12 months, or even longer, for a landlord to regain possession of their property. That's particularly problematic if, for whatever reason, the landlord is wanting to sell, they lose buyers because the tenants refuse to move till the bailiffs turn up, which could be weeks or months away.
So now landlords fear that the system will be even worse. If it's already difficult (a long, time-consuming and expensive process) to regain possession of their property, doing away with Section 21 will make almost virtually impossible. So lots of landlords with small portfolios* have been adopting the attitude/practice of 'whenever a tenant moves out, I'm not reletting, I'm selling'.
*Bearing in mind that lots of Buy-to-Let landlords (as opposed to the 'accidental landlords') got into it as an investment vehicle for their retirement fund. Lots of hardworking people of relatively modest means decided to buy property and rent it out because they didn't necessarily trust their works pension fund to provide for them in retirement - (Maxwell, Rover, BhS, etc, lots of little people have been shafted over the years) - and lots of people with relatively modest savings or investments were hit by financial crashes, stock market crash or banks going bust. So they decided it was safer to invest in bricks and mortar.
And before anyone thinks 'Great! Landlords are selling up! That means there will be more properties on the market for people to buy, so they're not reliant on private sector scum landlords!' I have bad news for you.
Not that urban is going to get out their violins and perform a concerto at the thought of landlords having a difficult time, but what comes next might be worse: banks and international investment houses are buying up property and becoming landlords. If you thought the average Joe who'd bought a couple of small terraced houses as an investment to provide an income during his retirement is bad, just think what the vulture capitalists are going to do to the sector. You thought Joe was a capitalist bastard landlord, wait till the capitalist bastards on steroids are your landlord. Think rents are high now? Wait and see how much higher they go. Many small scale landlords have been worried about raising rents to cover increased mortgage costs, because they're conscious of the impact of the cost of living crisis on their tenants, but also they don't want to put the rent up to the point their tenant can't pay and gives notice and leaves them with a void period, because they need the rental income to pay the mortgage. Those big investment houses won't care if some of their properties have void periods, they'll factor it in, they'll just increase and increase and increase the rents anyway, because they can afford to cope with the consequences, unlike the small-scale landlord.
Like I said, I don't expect urbanites to have much, if any, sympathy for landlords, I was just listing the increasing number of various factors, the ways in which landlords are being hit, to make the point that if people thought we were already in the middle of a serious housing crisis, the perfect storm is on the horizon and about to hit hard.
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