The private rented sector (PRS) features in several of the recent headlines of UK property news. Subjects covered include the freedom for tenants to keep a pet, a continued exodus of landlords from the PRS, and calls for a review of the sector’s tax regime.
In other news, growth in the building and construction sector is forecast and property owners are advised that adding a patio could increase the value of their home by up to £10,000.
Landlords ‘must accept Pets in Lets’ - campaign begins
Animal charities in the UK have launched a campaign calling for tenants to be given a legal right to accommodate well-behaved pets in rented accommodation, according to a story in Landlord Today on the 8th of February.
The Dogs Trust explains that a growing number of tenants are forced to look for cheaper accommodation as the cost of living continues to rise. But fewer let properties allow them to take their pets with them. The result is a significant increase in the number of tenants compelled to ask for their pets to be rehomed.
Another charity, Cats Protection, says that housing problems and the difficulties in finding suitable pet-friendly accommodation have also increased the number of pets taken into care.
Although the government’s most recent Model Tenancy agreement – that landlords might opt to use – encourages permission to be given for suitably controlled pets to be kept, tenants currently have no legal right to that possibility.
BoE: landlords are quitting the PRS
On the 2nd of February, the Bank of England published its quarterly Monetary Policy Report.
This confirmed the widely held but unwelcome conclusion that landlords are quitting the private rented sector and are no longer able to make the necessary investments in buy to let property.
Even while demand for rented accommodation continues to outstrip supply, says the Monetary Policy Report, landlords are still selling up and leaving what was once a profitable market.
The reasons given for this continued exodus are echoed by other analysts and commentators on the private rented sector – namely, the spread of tighter government regulation and an increased tax burden, rising buy to let mortgage rates and maintenance costs, and the consequent inability of many landlords to recover those higher costs through the rents they can charge.
Landlords call for tax review of private rented sector
In an article on the 3rd of February, the National Residential Landlords Association (NRLA) made similar arguments when it called for a thoroughgoing review of the way those in the private rented sector are taxed.
It, too, pointed to the growing demand for rented accommodation across the whole of England and Wales – 65% of landlords recorded an increased demand in the final quarter of 2022, up from 56% in the same period a year ago.
Despite that surge in demand, 30% of those landlords interviewed by the NRLA indicated that they would be selling at least some of their let property in the year ahead. Such disinvestment in the private rented sector is at its highest for six years and only a paltry 9% of landlords said they intended to increase their rental property holdings during 2023 (compared with the 14% who declared such an intention in the final quarter of 2021).
Since the tax burden is so often cited as a principal reason for quitting the market, the NRLA calls for a review of recent decisions to cut the mortgage interest allowance, the imposition of a 3% Stamp Duty surcharge on the purchase of rental properties, and the effective increase in Capital Gains Tax (CGT).
Construction sector is predicted to see further growth this year
Property Reporter on the 7th of February carried the welcome news that the building and construction sector in the UK looks likely to continue the growth it saw throughout 2022.
Along with other sectors of the economy, construction suffered rocky progress during the pandemic. In the years immediately preceding the periods of successive lockdown, the sector grew in value from £70.1 billion in 2013 to £108.6 billion by 2019.
Although that value fell back – by as much as 21% – during the final stages of the pandemic, the sector has bounced back to achieve renewed growth of more than 18% during 2021 and 2022 to reach a current value of almost £98 billion.
In the year ahead, analysts are predicting further growth – nearing 4% – in the sector.
Adding a patio could add as much as £10,000 to a home’s value
Average house prices in the UK have registered a fall for the fifth month in a row. If you are worried about the depressed value of your own home, a story in the Express newspaper on the 6th of February might offer some comfort.
According to the newspaper, one of the principal garden features sought by homebuyers is a patio – with an astonishing 76% of those interviewed in a recent survey saying that a patio adds value to any property. Indeed, the National Association of Estate Agents is said to believe that the addition of a patio could achieve an increase of as much as £10,000 in the value of a home.