Tenants in the private rented sector could lose out more

Thursday, 23rd June


‘The government misses the point by focusing on rogue landlords’

• SOME of measures taken against landlords in recent years, before the current government’s current white paper, are very good but an undesired side effect is to reduce the supply of private rental accommodation.

Housing supply is in crisis but the measures proposed in the white paper will make several additions to the list and supply will be further reduced.

Sure there are rogue landlords, some of whom flout the rules, but the government misses the point by focusing on rogue landlords which it acknowledges are a minority in any event.

Compliant landlords will simply get pickier or withdraw completely and the most vulnerable tenants will lose out.

Non-compliant landlords will remain so as only effective enforcement will remove them and existing breaches under the scope of current legislation expose poor enforcement.

Will those same vulnerable tenants become owner occupiers to fill in the gap?

Property not meeting the required rising standards will continue to be sold by landlords exiting the sector and will be acquired by owner occupiers.

There is a conflation in the white paper on this point. There is a suggestion that there should be more home ownership.

The white paper suggests mortgage costs, 18 per cent of household income, are lower than rental costs at 27 per cent.

It is silent on the fact that owners incur non-finance transaction costs and other costs that do not apply to renters and so the comparison is flawed.

Then will banks rush in to serve weaker covenant borrowers? I doubt it. Banks are especially picky, as most of us have experienced at one time or another; they do not want to take on potential defaulters.

Result, the most vulnerable in the private rented sector lose out more. This may seem like a victory for tenants, and is being positioned as such by the weaselly wonks, but sadly it is the wrong direction of travel.

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