Leaving Landlords To Boost Property Market?
We all know the demand for homes is greater than supply right now. This is why it is important to consider ways in which the supply of homes might be increased. It could be that landlords exiting the rental market helps the property market.
A survey conducted by The Mortgage Works offered the following findings:
- 52% of landlords with a property that requires improvements to meet new MEES regulations have considered selling
- 58% of landlords with between 6 and 10 properties have considered selling some or all of their properties
- For landlords with at least 20 properties, 63% of landlords have suggested selling all or some
- For landlords with one property, 35% have considered selling
It is important to think how this will impact the rental, and property market. The immediate concern is a big drop in rental property, but it will add to the availability in the housing market.
With demand outstripping supply at this point in time, it might be a good thing to see more homes come onto the marketplace.
Will this affect housing market?
Daniel Clinton, head of lending at The Mortgage Works, said: “With currently less than four years before all new tenancies need to be in properties rated EPC C or above, there are still landlords who need to undertake remedial work on at least one of their properties. They are therefore understandably concerned about how they will both fund the work, find someone to do it and have it completed in time. The side effect of these concerns is that a significant number of landlords admit they are ready to give up and already considering selling properties.”
Daniel Clinton concluded by saying; “An unintended consequence of this sentiment could result in a backwards step in meeting the government’s target around climate change, for example, if these properties are taken up by the owner occupier market, where there are currently no minimum energy efficiency requirements. Working with the sector to understand how best to help landlords improve the energy efficiency of their properties and the timeframe within which they can do this may ultimately lead a better outcome for everybody.”
Leading body has concerns about findings
Propertymark responded to the report, voicing their concerns about the situation.
Propertymark policy and campaigns manager Timothy Douglas said: “As domestic energy use accounts for 14 percent of overall UK emissions and 90% of homes in England currently use fossil fuels, improving the energy efficiency of the nation’s housing stock is one of the most significant challenges in reaching net zero emissions. If the alarming number of landlords who have considered selling up within the TMW report go on to do so, it will have a detrimental effect on not only the government’s ambitions to reach net zero, but also for the thousands of renters looking to be housed as stock levels deplete. In some parts of the market, this will put additional burdens on local authorities and increase demand for social rented housing as not everyone can afford to buy.”
Timothy Douglas continued by saying; “To support the longevity of the private rented sector, the government must introduce realistic and achievable targets that take into account the diversity of the country’s housing stock. Furthermore, without incentives and sustained funding options that landlords can tap into, it is unlikely that the government’s proposals for energy efficiency will be met.”
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