While there are high hopes that the 12th December election will at least allow the next government to govern, there are serious concerns about the UK housing market. A recent report by the Residential Landlords Association (RLA) highlights the growing concern amongst buy to let investors. Recent figures suggest that 31% of landlords plan to sell at least one property over the next 12 months with just 13% looking to add to their portfolio. While politicians have successfully turned the public wrath on property investors, and especially private landlords, could this politically motivated strategy backfire?
UK housing crisis
The UK has staggered from one housing crisis to another in recent times but we stand on the cusp of what could be the crisis of crises. The introduction of new taxes, added protection for tenants and even talk of a right to buy for private tenants has not helped sentiment. It is absolutely crazy for politicians to be picking a fight with property investors when the social housing sector is in crisis and homelessness is on the rise.
Will the next government help private landlords?
This question may or may not be answered over the next few weeks with recent polls suggesting the Conservatives have a significant lead over Labour. However, Theresa May’s previous snap election saw Labour clawback a Tory lead as she failed to secure a majority. If there is one thing that investors detest it is uncertainty!
There is uncertainty as to whether the next government will have a majority, the power to push through their own agenda and finally, we can only hope, bring Brexit to a close. It is not difficult to see why many private landlords are reconsidering their positions in light of the never-ending flow of taxes and regulations. Let’s not forget, even though the UK property market has started to slow down, many private landlords will be sitting on significant capital gains on their properties. As the uncertainty continues, could you really blame them for cashing in their private let chips?
Encourage not discourage investment
The RLA is amongst a number of bodies who are calling for the additional second property stamp duty tax to be abolished. They have also highlighted the attractions of a housing court which would allow tenant/landlord issues to be resolved much quicker than they are today. Whatever your opinion regarding property investors and private landlords, these two ideas could have far-reaching consequences in a positive manner.
Many private landlords are hanging their hopes on Boris Johnson securing a majority and pushing through an array of positive changes to help private landlords. Everyone in the industry appreciates there are rogue landlords, there is a need to protect tenants but fair is fair, there has been no balance of late. The fact that many more private landlords are looking to sell properties as opposed to investing in the sector, says everything.
The UK has also been starved of new build properties for decades as a means of supporting house prices. However, that issue is one which needs to be resolved sooner rather than later!
There is no doubt that Boris Johnson is more capitalist than socialist, more pro-investment than anti-investment but can he secure a parliamentary majority to push through his agenda? On the flipside of the coin, Jeremy Corbyn has already been waxing lyrical about his intended attacks on the rich, with private landlords top of his list.
It is therefore not difficult to see why many private landlords are concerned about the short term outlook. Can they invest more into the rental market with confidence? Should they hang back and see how the political land lies after the election and Brexit? How can associations such as the RLA ensure that future regulations are fair and just?
In the blink of an eye the UK housing crisis could worsen significantly and with no short-term fix this would be criminal neglect by politicians, right across the board.