Author : Oliver Hopkins
The Letting Market in the UK is heading towards troubled times again. The pandemic is over, and workers are returning to offices, fuelling demand for rented homes. This resulted in a sharp increase in rents. Landlords unable to cope with the loss-making situation are selling up their properties. To add to the industry's problem, there is a shortfall in social housing.
Property experts also agree that the rented homes market faces stressful times as demand grows and supply is perennially short. People are returning to offices as many companies have ended the WFH arrangement. Many of them can't afford the high and rising rent. The government has a huge problem to deal with. The government is committed to legislating and reforming in a manner that will help renters. The aim is to create a higher standard of rental accommodation. However, removing tax relief on interest payments will not help improve supply. On the contrary, it only ends up creating more problems for landlords.
The need of the hour is for the government to focus on improving supply and legislate policies in that direction. With increased competition for tenants and fair rents, the standards will gradually improve, but availability must increase. While the Build to Rent is a viable option, it will take longer to come through because there are many bottlenecks inhibiting the speed of delivery. The current challenge is a serious one and requires quick and innovative solutions.
With many landlords exiting the market, citing their inability to comply with new energy regulations for energy performance certificates and the changing tax rules, the shortage of homes problem will only aggravate. Most landlords must invest heavily in their properties to meet energy regulations. They must spend heavily installing new windows, boilers, and other related fixtures. The cost of materials has also increased significantly. Buy to Let investors are entering the market because of the weakening pound.
Many investors are cashing in on the situation as rents continue to surge. While landlords continue to sell their properties, overseas investors are coming on board. The problem is expected to continue for some time as landlords grapple with tax implications. Property experts urge tenants to be proactive to improve the chances of securing the rental home they want. Waiting for a response to their application from any portal is not advisable. Landlords must also act fast by using the services of a reputable real estate expert/agent to manage their property. They will find it extremely challenging to understand and handle the new legislation independently. By hiring agents, they can get the best rent for their property and keep their residents happy.
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