With savers receiving poor returns from banks and building societies in recent years, a number of people have unsurprisingly continued to turn to residential property as a means of supplementing their income, supported by low mortgage borrowing rates, solid demand from tenants and stable yields, as buy-to-let consolidated itself as the investment of choice.
Even despite a challenging few years for the buy-to-let market, characterised by tax and regulatory changes, investment in buy-to-let has continued to outperform most major asset classes, as Britain’s rented sector continues to expand, with a sixth of the population now living in accommodation rented from private landlords.
But with interest rates rising, and an ever-growing level of rules and regulation coming into play, interest from new investors in the buy-to-let market is waning, while many existing landlords are now selling up.
A recent poll, undertaken by Mortgages for Business, found that a third of landlords – 33% – deemed the government’s plan to scrap Section 21 particularly concerning.
Under government plans, landlords are set to lose the right to evict tenants at short notice without giving a good reason for doing so. Until now landlords have been able to use Section 21 of the 1988 Housing Act to evict renters after the end of a fixed term tenancy, with two months’ notice.
Government plans will effectively create open-ended tenancies whereby landlords will have to give a reason for eviction — such as rent arrears or antisocial behaviour — as well as include evidence of the tenant’s shortcomings.
To assess the impact that regulatory changes are having on landlords and to understand why many are potentially thinking about selling up in 2023, Move iQ’s latest people in property series sees presenter Phil Spencer joined by landlord and co-founder of Property Tribes, Vanessa Warwick, as well as Timothy Douglas, head of policy and campaigns at Propertymark.
The three property experts discuss the current state of the private rental sector and what impact landlords selling up is having on the housing market and UK renters.
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