A prominent rental market analyst is warning that elements of the reform legislation proposed by Labour “are casting dark shadows” over the lettings sector, with few landlords likely to sleep easy at possible threats to their investments. Doug Shephard, director of the Home website - a listings platform that also conducts respected monthly market analyses for the lettings and sales sectors - says the new government’s upcoming Renters Rights Bill may prove to be final straw for many landlords.
He cites the possibility of Metro Mayors - all but one of which are Labour - acting as guinea pigs for the introduction of some forms of rent controls, as well as the provisions of the Bill itself, covering restrictions on evictions, stronger redress rights for tenants and encouraging more pets in rental properties. Shepherd writes in the latest monthly report: “Activists’ calls for rent controls and an end to contractual tenure are casting dark shadows over the future of both the sales and rental markets. Too many landlords are already selling up, fearful that either they won’t be able to set the rent required to cover their costs or they’ll be forced to join expensive licensing schemes or both.” He fears this will add to the long term crisis in the lettings sector - a continuing excess of demand over supply. He points out that across Britain in August 2019, 96,000 properties were available for rent: this month, August 2024, the figure is just 66,000, representing a drop of 31%. As a consequence, rents have risen progressively but Home believes the current rate of rental growth across the country as a whole is being dragged down by the particularly sluggish performance of London.
The website says the annualised national growth figure for asking rents is just 1.1%. While Wales continues to lead the regional growth table, followed by the South West, with rises of 14.5% and 11.7% respectively year-on-year. Yorkshire and the North East continue also show double-digit annualised growth. Meanwhile, the year-on-year decline in Greater London rents is now -1.2%. In the capital the boroughs of Bexley and Haringey indicate the worst declines in asking rents with annualised rental falls of 16.6% and 9.4% respectively.
The East and West Midlands also show falls (-2.8% and -0.8% respectively). On the sales side of the market, asking prices rose by 0.2% during the last month across England and Wales - the seventh consecutive monthly rise - and are now up 1.2% compared to August 2023. Prices increased again in Wales, Scotland and all English regions except the North West and South East where they remain unchanged. The unsold sales stock count for England and Wales rose again over the last month to reach a 10-year high for August. Nearly 6,000 properties were added to agents’ portfolios, taking the current total of unsold stock to 494,837.
