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The reality is that those with 5 star credit references are the ones most likely to be buying the houses that the landlords are selling, as more and more landlords cash in and sell up.
So, those tenants will exit the PRS and the numbers will balance out as they do now.
After that, we can decide between renting to the remaining tenants, or having voids.
With more tenants chasing fewer properties to rent
If ten landlords, sell one house each to a first time buyer, then the ten first time buyers are no longer prospective tenants, therefore it cancels itself out and there aren't more tenants chasing fewer properties (excluding the immigration debate of course).
Edit - AccidentalInvestor beat me to it !
Except a high proportion of first time buyers were previously living in HMOs, Student lets or with parents, so it's swapping a room for a house, not a house for a house. The problem is that there is not enough accommodation for families, especially those who can't afford to buy, don't have sufficient credit rating, or choose not to for mobility reasons. These are the sorts of people I rent to. I have asked tenants why they don't buy in the past and they either say they aren't ready to be tied down or that they need three years steady employment to get good credit.
The problem is that there is not enough accommodation for families
Which brings us back to the real underlying issue that not enough houses are being built in this country.
S24/S21 are tiny drops in the ocean compared to that.
If we could return to people buying houses at 3x average salary, we would achieve the "Property Owning Democracy" that used to be aspired to and the PRS would be much less relevant (and less hated). The only way to bring house prices to that level is to increase supply and build build build.
Less lucrative for landlords of course as it would end capital growth, but I'd be happy with what's right for the country (people owning their own home gives them a stake in society and turns them away from Marxism/Socialism/Corbyn) and I'd just invest in something else.
Do we have any data of times the RLA have warned this in the past vs how much the sector actually contracted?
The UK's largest letting agent. No admin fees for tenants, first listing free for landlords!
Proud OpenRenter, reluctant lead tenant.
I think you have just volunteered a fun project for the OpenRent Blog Sam.
_________________________________________________________________________The above post is not financial advice, its often me rambling - passing time on a coffee break.If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance._________________________________________________________________________
Haha that would be some good content!
Given that the sector has only grown since the 90s, however, I fear I know what the results will be in advance...
TBF, the numbers in the article do not seem quite to justify the headline - yet.
But the problems will be for those who have to rent, for example the 10% with impaired credit.
Councils are imo unlikely to buy - they sold of the stock off as unimprovable economically in the 1990s, and we now have the EPC rules.
Institutions won't buy single units ... they could not compete before Osborne, and they will not get the returns they need now. There is a reason why L&G are in the High End, and their rents are £1100 pcm for a one bed in Bath vs 850-900 in the market. They will also need to know where they are with S21 and the impact of no fees.
L&G cannot afford to be turned into a housing-association-in-practise imo.
The RLA only represents the respectable tip of the iceberg so far as LAs are concerned. Far from all LAs are members and the ones that are represent the cream and are probably geared more towards the higher end financially. Far from all LLs use LAs, many wouldn’t touch them with a barge pole having had bad experiences or not wanting to create a paper trail. There are more of those than many on here would imagine.
So their figures can only be taken as an indication
I am just getting out now, 2 families made homeless, who could have predicted that!
Offers I am getting are from prospective LLs, offers are a bit cheeky but not vulture levels, even had a London council looking to buy out of town to move tenants out.
One was a PPR for me, so the new CGT rules were an extra impetus.
But TBH I am just sick of the endless nonsense, on April 1st someone posted a fake news story here, took me in completely, I just thought another week, another kick in the teeth.