The Intermediary Mortgage Lenders Association (IMLA) has released a report highlighting potential issues with proposed Government changes to the private rented sector (PRS).
The report outlined concerns regarding Government interventions, including the Renter’s Rights Bill and new energy performance requirements.
IMLA found that the PRS provides homes for nearly 20% of UK households, and that small landlords make up the majority of the sector, with 80% holding one or two properties.
Only 13% were portfolio landlords with four or more properties, although they owned 39% of the stock.
Regulatory costs and risks in the PRS are set to increase, which IMLA warned would likely lead to higher rents.
IMLA pointed out that more than 100 regulations have been imposed since 2004, and while some changes in the Renters’ Rights Bill may be justified, the additional costs for landlords could be passed on to tenants.
The trade body also expressed concerns about the risk posed by potential rent controls. These controls could deter new investors and push some landlords out of the market.
For others, they would raise the required rate of return, leading to increased rents for tenants.
IMLA highlighted that market dynamics should drive up standards in the PRS, and that tenants’ ability to choose from various properties is the best deterrent against substandard housing.
The organisation called for fairer policy application across different housing tenures.
It noted that a proposed deadline for PRS properties to achieve a minimum EPC C rating may unfairly impact the sector and could result in reduced supply as landlords might choose to sell to owner-occupiers instead.
Kate Davies (pictured), executive director of IMLA, said: “The government’s long-term plan to massively boost much-needed social rented accommodation is very much welcomed, but cannot come at the expense of the UK’s private landlords, who currently play a vital role in providing homes for 20% of the country’s households.
“IMLA is reiterating a call we have been making for some time, for policymakers to take action to ensure those landlords feel confident enough to remain in the sector and continue to offer this essential housing for the country’s renting population.
“Continuing to heap expensive regulation on the sector risks pushing out more of the smaller landlords who make up the lion’s share of providers, creating a vicious circle of fewer rental properties available and higher rents for tenants.”
