{"id":6095295,"date":"2023-08-11T08:50:08","date_gmt":"2023-08-11T07:50:08","guid":{"rendered":"https:\/\/www.buyassociationgroup.com\/en-gb\/?p=6095295"},"modified":"2023-08-11T14:22:02","modified_gmt":"2023-08-11T13:22:02","slug":"rental-property-deman","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-gb\/2023\/08\/11\/rental-property-deman\/","title":{"rendered":"Demand for high-quality rentals “will always be there”"},"content":{"rendered":"

Attracting buy-to-let investors should be high on the government’s agenda to fulfil the need for high-quality rental property across the UK.<\/strong><\/p>\n

The private rented sector is a crucial segment of the UK’s overall housing market, with almost a fifth (19%) of all households – which equates to around five million households – living in private rental property currently.<\/p>\n

The level of need in the sector has been exacerbated to some extent by rising house prices<\/a> and mortgage rates, meaning many would-be buyers are remaining in rental property for longer. For many young professionals, particularly city-dwellers, renting is also a more flexible lifestyle choice.<\/p>\n

However, as Neil Cobbold, managing director of PayProp UK,<\/a> points out, recent government measures have caused some landlords to leave the sector, negatively affecting the huge number of tenants who rely on it. These measures include removing mortgage interest tax relief<\/a>, and the promise to introduce stricter energy efficiency standards.<\/p>\n

He believes the government should take the high demand for quality rental property into account, pointing out that there have been calls to reverse Section 24 (changes to tax relief), and to rethink its energy performance certificate (EPC) proposals for rental housing.<\/p>\n

Reverse tax relief measures?<\/h4>\n

That being said, the UK buy-to-let property investment arena remains hugely popular and lucrative for many landlords, thanks to the strong yields on offer in some locations<\/a>, as well as long-term capital appreciation prospects that exist within the UK housing market.<\/p>\n

Property prices in the UK remain an average of around 21% higher than they were pre-pandemic, despite recent small falls, which many pin to a correction in the market after an unexpected acceleration that occurred after 2020. Most forecasts expect prices to return to growth over the next five years.<\/p>\n

\u201cThe private rented sector has been under the government spotlight in recent years and there is no doubt that this may have contributed to some landlords leaving the industry,” says Cobbold.<\/p>\n

\u201cWhile we welcome measures to improve the quality of housing in the PRS and strengthen tenant rights, we also believe that more could be done to both incentivise landlords to remain in the sector and to attract new investors.<\/p>\n

\u201cIt has been widely discussed within the industry that the reversal of Section 24 may be such an incentive for landlords to remain even with more regulation.<\/p>\n

\u201cBeing allowed to deduct mortgage payments from rental income before tax would make a huge difference to landlords\u2019 bottom lines.\u201d<\/p>\n

Energy efficiency in rental property<\/h4>\n

Improving energy efficiency standards<\/a> across the whole housing market is among the government’s top priorities for reaching its net-zero carbon targets by 2050. New-builds are built with much higher energy efficiency credentials now, and rental property must achieve an EPC rating of E or above to be let out.<\/p>\n

However, there are currently proposals in the pipeline to increase this minimum standard to a D or a C for new tenancies from 2025, and for existing tenancies from 2028. While this would provide a better standard of living for those living in rental property, it could also prove near impossible to achieve, according to many.<\/p>\n

\u201cThe measures required to achieve this new standard could prove to be too expensive for some landlords,\u201d says Cobbold.<\/p>\n

\u201cThe UK has some of the oldest housing stock in Europe and the industry believes that the government should give some thought to offering financial support to landlords who might struggle to make the sometimes significant investment required.<\/p>\n

“Extensive insulation work and the installation of new heating systems can be prohibitively expensive \u2013 especially in those parts of the country where rents are lower and it would take far longer for landlords to see a return.\u201d<\/p>\n

There is a limit on how much landlords must spend in order to achieve the desired energy efficiency rating, and if the required EPC is not met, the landlord can then ask for an exemption. However, lower-rated rental property is likely to become less desirable as overall standards improve.<\/p>\n

Cobbold concludes: \u201cThe demand for high-quality rentals is always going to be there and the government has got to find a way to attract investors who are interested in being the landlords of tomorrow.<\/p>\n

\u201cThe country desperately needs more, newer, greener homes in the PRS \u2013 especially in areas of high population where demand has gone through the roof.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Attracting buy-to-let investors should be high on the government’s agenda to fulfil the need for high-quality rental property across the UK. The private rented sector is a crucial segment of the UK’s overall housing market, with almost a fifth (19%) of all households – which equates to around five million households – living in private… Read more »<\/a><\/p>\n","protected":false},"author":1069,"featured_media":6092927,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[2,4,6],"tags":[15,453,98],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6095295"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/users\/1069"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/comments?post=6095295"}],"version-history":[{"count":5,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6095295\/revisions"}],"predecessor-version":[{"id":6095322,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6095295\/revisions\/6095322"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media\/6092927"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media?parent=6095295"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/categories?post=6095295"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/tags?post=6095295"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}