With private rents in Britain’s biggest cities falling by as much as 15% and with up to 50% of tenants now claiming housing benefit, one would have thought this new economic reality would have had a big impact on the buy-to-let market.
Not so according to DJ Alexander, CEO of Apropos, a UK-wide letting firm which finds that the “attitudes and actions of landlords and tenants” have remained stable compared to the same period last year.
This year, in the ten months to the end of October, the firm saw 103 of its landlords serving notice on tenants compared to 107 in 2019, plus the number serving notice has fallen substantially since the ending of the first lockdown in July, a drop of 20, from 60 in 2019 to 40 this year.
The number of tenants serving notice on landlords has also fallen. Apropos figures show a drop of 18% since the end of the first lockdown. From July 2020 to October the figures were 741 this year compared to 875 over the same period last year.
However, this increase in tenant stability means that the number of new tenancies started by Apropos has been lower, a drop from 850 to 695 over the last four months.
David Alexander, joint Chief Executive Officer of apropos by DJ Alexander, says:
“These figures highlight a much greater stability and resilience in the PRS than might have been expected following the first lockdown. Both landlords and tenants have shown a much greater belief and enthusiasm for remaining within the sector.
“Landlords have been serving fewer notices and tenants have been happier to remain where they are rather than undertake the uncertainty of seeking a new home. There is little doubt that the pandemic has made people focus more on their homes and their living space. Where people live has become so much more important since the lockdown so that once people find a good home, they want to stay.
“The result has been many more people staying put. It is incumbent upon everyone in the PRS – landlords, tenants and agents – to ensure that homes are maintained to the highest standard so that individuals can feel safe and secure. Security of tenure has rarely been more prized, and many more tenants and landlords seem to hold this view and are staying where they are rather than moving on. Stability is a vital element in the housing market and these figures show just how important it has become in the last six months.”
Mr Alexander concluded:
“Landlords and tenants are continuing to show faith in the PRS. Given that England has now entered its second national lockdown it is essential that the Westminster government shows continued faith in the sector by ensuring that landlords are provided with financial support to continue providing homes for millions of people. Failing to financially support this vital sector at this time would be disastrous for landlords and tenants.”
Commenting on rumours that the chancellor, Rishi Sunak, is being urged to double capital gains tax rates while reducing the exemption limit Mr Alexander said it has triggered fears that buy-to-let landlords, investors, those with second homes, and small business owners could face significantly higher tax bills. He commented:
“The OTS (Office of Tax Simplification) review of CGT (Capital Gains Tax) suggesting a huge increase in the rate of taxation for landlords, second home owners and investors would have an enormously detrimental impact on the housing market.”
If the Chancellor targets the private rented sector it will be an “extremely risky” strategy, putting at risk the future of the second largest provider of homes in the UK. It would not be possible to fill this gap if there was a mass exodus of landlords and investors from the market over a short period, according to Alexander.