4th
Feb 2021
Many agents have sent out stark warnings that the private rental sector will be forever changed as both landlords and tenant’s objectives have been and will be drastically changed due to the Covid pandemic.
Speaking to a property clerks inventory firm, the agents firmly believe that within a comparatively short space of time both landlords and tenants will change their views on the type of property and more importantly location.
Simon Shinerock, chairman of a home moving firm condemns the government’s way of promoting Build to Rent which he believes discriminates landlords.
He says: “As things stand, we will see more and more small, undesirable, built-down-to-a-price apartments and less and less family homes available to tenants. This policy has been revealed as even less relevant by the pandemic because, whereas in the past, people went to live where the jobs are - now the jobs can often be done from anywhere and people will increasingly choose to live everywhere.”
Yasser Elkaffass, managing director of an estate agents says the necessity of working-from-home will long continue.
“Buyers and tenants are increasingly realising that their current homes are not ideal for their new lifestyle. Small families now need a garden - and a second bedroom is now needed for the bachelor who works from home” he says.
He also predicts that there will be major increases in rents as demand will cause a surge in prices, however as the economy is more than likely to deteriorate even further “tenants, especially in London, will find it difficult to pay their rents and landlords will have to show flexibility in reducing rental prices or finding new tenants.”
Ross Nichols, co-founder of an agents, says the next twelve months will be even tougher for landlords because of taxation and regulatory changes.
“Some [landlords] will get squeezed out by Build to Rent and changes to carbon monoxide and energy performance regulations could hit a few in the pocket. Perhaps the biggest cloud is the Office of Tax Simplification’s recommendation to increase Capital Gains Tax whilst simultaneously lowering the annual allowance dramatically. If this comes then many landlords, especially smaller ones, will run for the hills.”
Nick Neill, of an estate and lettings agency takes an optimistic viewpoint as he says that there is one major reason why landlords will continue to make good profits.
“What remains constant is the critical lack of rental supply – or property supply generally for sale or rent – which means the longer-term outlook for landlords remains positive as far as capital growth is concerned. And as long as any profits made are not taxed too heavily in the future, this will remain an attractive option for many, especially when interest rates remain low and capital growth remains high, as highly leveraged property purchases earn the landlord much more than the return on the deposit value alone might, in other investment vehicles.”
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