Election fever and the rental sector

In her column for this month’s Tunbridge Wells Business Magazine Becky Moran of TN Lettings looks at how the impending General Election will impact lettings…

Whilst ‘fever’ may not be the right term as a noun many landlords may be suffering from a fever as a verb waiting anxiously on what the outcome of the election and what it will mean for their rental properties. Likewise, tenants will hope for change in laws such as the no-fault eviction law, long promised by the Conservative’s Michael Gove but put on the back burner whilst the Government ensures the courts can cope with the slew of legal cases that will occur.

What is currently unclear, with manifestos not yet published at the time of writing, is what each party’s stance will be around housing but what we do know is it will be a major battleground for votes. There are an estimated 2.8 million landlords in the UK and around 1 in 5 live in rented accommodation – that’s a lot of votes available based on housing policy. 

There is still a huge hole in housing stock required in the UK. Some estimates put it as high as four million and increasing. So with the current aim of building 300,000 new homes per year, realistically speaking it would take nearly 50 years to catch up.

So what therefore does a landlord do? Unless you’ve got a crystal ball it’s hard to tell. The Bank of England in its monthly report talks about interest rates being likely to drop in the second half year which may give some comfort – especially to those who are coming out of a fixed rate mortgage in the next 12 months. No political party has mentioned anything about the tax burden on landlords or confirmed any housing policy.

Recently we’ve seen some landlords putting their properties up for sale and this in turn causes the current tenants to become rightly anxious about their future in that property with many looking to move on and secure a suitable home for themselves.  With the current market in sales moving somewhat slower than it has been, houses are taking an average of six months to sell. Then there’s the wait to see if this sale goes through with buyers struggling to secure mortgages as easily as they used to with the current affordability and the property needing to value to the right figure for the mortgage to proceed. This then leaves the landlords with void periods as the tenants have moved on and the landlords still potentially have mortgages to pay. This sometimes can be for extended periods and costs start to build causing no choice but to re-rent the property out again.  

Whilst the housing market will go up and down in the short term and Government policy may change, what history does show us is that property is a stable long-term investment. This is highlighted in the fact that 68% of landlords are over 55 years old. 

I do think the lesson here is if you plan to sell, sell quickly at the right price or at auction unless you can cover the mortgage for at least six months.   To discuss you’re your rental property please do  call me on 01892 249070.


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