New laws hit home in private rented sector


The impact of new regulations, laws and taxes is increasingly being felt in the Private Rented Sector.

Tenants and landlords have both faced the consequences of these changes over the past year with the supply of PRS properties falling, and inevitably leading to some rent rises.

Government interventions over recent years have included changes to stamp duty and mortgage tax relief as well greater regulation in areas such as energy performance.

Chinneck Shaw director Neil Shaw said: “Recent changes to legislation in the form of new regulations, taxes and laws have had the effect of encouraging accidental landlords and single property landlords to sell up and leave the private rented sector.

“The obvious effect of this is to reduce the supply of private rented sector housing. If you reduce the supply of a product then there is strong pressure for prices to rise and that is what appears to have happened in the last 12 months.”

Neil added: “Most reputable landlords recognise and understand the concerns of tenants who will often feel the most pain from rental increases.

“Their ability to limit rent rises has become increasingly constrained as red tape grows and net rental returns fall.”

Larger, professional portfolio landlords with a longer term view and well-managed properties are insulated to the changes to a greater extent than smaller Buy to Let operators with excessive gearing or costs.

Although change can be unsettling, the Private Rented Sector generally remains in good shape for longer-term landlords with well-managed properties still delivering strong returns on investment; while also helping to provide a more stable market for tenants too.