Conference season is over, we’ve seen the first increase in interest rates in ten years and to top it all off we have the Chancellor’s budget looming over our heads.
On a the latest episode of the NLA’s podcast Inside Property, Richard Blanco is joined by Chris Norris, Head of Policy at the NLA and landlord and journalist Victoria Whitlock from The Evening Standard, to discuss some of the latest news in private renting.
Here’s what the panel chewed through this month…
Interest rate rises
The BoE has raised interest rates to 0.5% – the first hike in 10 years. Though this small increase may not come as too much of a surprise, people are still feeling anxious over the impact it’ll have on their mortgages. Extra payments, coupled with recent tax changes and a softening of rents means landlords’ margins will be squeezed to the point many will be considering their futures in the sector. Is this indicative of a long term trend and will landlords end up selling properties in response to further changes?
The dreaded Budget
At this year’s Conservative conference, Sajid Javid spoke about the possibility of the Government providing tax relief and other fiscal incentives to landlords who would be willing to offer longer tenancies – this, he hinted may come out in the Budget. But is it enough to incentivise landlords?
Stamp duty reform is perhaps the most nerve wracking prospect and there’s a growing concern that the Government may opt to increase it further for additional property purchases – after all, the existing 3% levy brought in 1.7bn from 2016-17 and didn’t show any real signs of slowing the market down. But would an increase be disastrous?
Return of council housing
It’s no secret we need more social housing so the news that Theresa May has committed to spending £2 billion to build 25,000 homes has been welcomed across the board. This should ease some pressure off the PRS in filling the current gap. Alongside housing policy to help the more vulnerable in society are those that help young people onto the housing ladder in the form of popular help-to-buy schemes which Labour is in favour of extending to 2027. But do such schemes raise the question of whether our society is shunning the concept of renting and putting too much emphasis on property ownership?
Conservative vs Labour policy offerings
The big points of debate for both parties centre around deposit caps and restrictions on letting agents in response to hidden and increasing fees. Will stricter regulations make agents more professional and transparent, and will this make tenants want to rent from them rather than directly from landlords as recent trends show?
The Conservative conference discussed the possibility of a redress scheme for landlords. If agents have to be part of a redress scheme then should landlords too, and how does the NLA’s training for landlords fit into this?
The Labour conference provided even less clarity and more speculation around proposed rent controls, 3 year mandatory tenancies and inflation caps on rent. Do landlords have much to fear under a Corbyn premiership?
What will your property business look like in 2025?
With so much political uncertainty in the air, it’s difficult to say what the PRS will look like in two years’ time let alone eight. Will the PRS have shrunk or grown? Do we need to be casting the net wider and taking a closer look at investment from overseas? What impact will Brexit have?