Rents increased on average by 12.1 per cent in the UK last year, far ahead of the 6 per cent increase seen in average earnings.
This has been fuelled by a chronic mismatch between rental supply and demand, with demand pressures made worse by house prices that are keeping the prospects of homeownership out of reach for many and forcing them to stay renting for longer.
At the same time, protections for renters have not improved and there has been no clarity on when the much anticipated renters reform bill – which will ban no-fault evictions – will become law.
But if we do see small landlords leave the market, what are renters left with?
When the prospect of homeownership is made unattainable for an entire generation it’s no surprise that the anger about this will be directed at the people most visibly benefiting from the system.
While this anger is justified, I would argue that small landlords, who often face the brunt of criticism, are not the source of the problems with the UK’s rental system and that we shouldn’t be so quick to force them out.
Interest groups like the National Residential Landlords Association take the view that landlords are being unfairly vilified by the government and that regulations being imposed on them are going to drive small scale landlords out of the market.
There is little to no evidence to suggest we are seeing any great exodus of landlords from the market just yet, but the increase in mortgage interest rates seen in the past six months are certainly having an impact.
For a lot of landlords with mortgages, they are faced with the choice of either increasing rents or selling up.
But if we do see small landlords leave the market, what are renters left with?
Build-to-rent
Government policy in recent years has skewed in favour of institutionalisation with growing support given to build-to-rent developments.
Arguments in favour of a more institutionalised rental market tend to highlight the benefits of better insulated and higher quality housing stock, both of which are absolutely needed.
But rental properties provided by institutional landlords tend to come at a higher cost for tenants and many are simply not in a position to afford it.
Recently I asked Renters' Rights London if they see much of a variance in complaints and issues between small scale landlords and institutional landlords.
My hypothesis was that because of the shorter chain of contact, smaller landlords are in general easier to reach and quicker to resolve issues.
