The latest research report from RLA PEARL (the Residential Landlords Association) has been released, concerning key trends in the private rented sector (PRS).
It has revealed specifically that support from landlords for the sector is dwindling. As well as the estimated 46,000 private rented homes that have already been lost, it estimates a further net loss of 133,000.
The recent Government tax changes are thought to be the main reason for this drop, as they have dissuaded many private landlords from continuing their investments in the sector.
Previous research from RLA PEARL has shown that 62% of landlords believed that the profitability of their investments would be reduced by at least 20%. 67% responded that they were considering minimizing their investment due to these tax changes by the Government.
Within his post on the RLA website, Supporting Private Landlords not Pushing them out is Key for a Modern Sector of the Future, Dr Tom Simcock, the Senior Researcher for the RLA, states: “These changes make it easier for those who are wealthier and cash-rich to invest in the private rented sector, over those middle-income earners that may look to purchase a property with finance.
“While also limiting the access of the sector for the more vulnerable tenants and those who can’t afford to buy nor can’t access social housing.”
Dr Simcock also discusses the Government’s recent announcement for the consultation on three-year tenancies: “This could be beneficial for both landlords and tenants in the right circumstances and signifies a move towards an evolved modern private rented sector.
“However, in the international examples of private rented sectors, where there are longer-term tenancies, there is also smart taxation policies that support private landlords to provide long-term homes.”
He concludes: “We need to move to a broader but fair reform of private renting; with improved access to justice for landlords and tenants, expanded options for security of tenure, and reformed taxation policy that supports not penalise private landlords.”