Reasons behind the housing crisis in the East Midlands.

If you are looking for guidance on why we have a housing crisis in the East Midlands, then this episode of MoveiQ from Phil Spencer nails all the issues for both landlords and tenants.

The guests are professional landlord Vanessa Warwick, co-founder of Property Tribes and Timothy Douglas of Property Mark. Both highlight the need for the sector to route out rogue landlords and hold landlords to account who do not intend providing good quality housing for people. They discuss the effect of the raft of legislation on landlords (currently 168 different regulations and more to come) and what the exodus of private landlords will mean for tenants moving forward, namely a lack of supply which will push up rents as too many people will be ‘bidding’ for too few houses to live in. Social housing is not being built quickly enough, and in the past the private rental sector picked up the slack.

Local authorities do not have the resource to police the quality of housing even though they have the tools to do so.  inspections, backed up by league tables.

The legislation is clearly targeting smaller landlords and they are most at risk, (there are 2.3 million landlords in the UK and 97% of those have three properties or less) as many self-manage and find it impossible to keep up with these regulations. Many of these landlords are selling up, they are struggling to make a living out of it or if they are working and building for retirement, they see the tax burden as too onerous to carry on.

Rent controls were discussed and rejected by Northern Ireland and Wales however in Scotland they went ahead with it and the result has been a mass exodus of landlords north of the border. Some of the regulations and ideas have been very well received in Scotland, they have brought in an accreditation scheme for agents and the result has been a significant rise in professionalism (as quoted by agents in the sector), with tenants and landlords being able to trust that good tenants are being put in good quality accommodation, managed by people who care. What a shame they could not get the balance right.

EPC regulations continue to be an issue with uncertainty as to when these are coming in. Confusion on leasehold properties where the EPC does not meet the guidelines; who is responsible? The landlord or the leaseholder as in flats they are often different people. The cost of upgrading older properties will be onerous and many landlords are opting to exit the market now rather than a later date when the same house may be worth significantly less as a result of the regulation.

Ultimately there is a lack of planning and direction from government, there is a housing crisis in the East Midlands and presently we do not see any potential to change this. Tenants are struggling to find affordable rental homes and are unable to buy due to banks lack of desire to lend with any semblance of risk, and it is difficult to see how this cycle will change short of a housing crash, which is even more unlikely.

Vanessa suggested that self-managing landlords should be made to rent through accredited agents in order to weed out the rogue landlords and provide an all round better experience for all parties involved. This will improve reputations in the sector as a good tenant will only want to rent through an accredited agent who wants a good reputation maintained. The flip side is that bad landlords will attract the bad tenants, but at least the media will know where to go to for their headlines about landlords!

Interesting times for landlords and tenants alike, we hope the housing crisis in the East Midlands will be resolved, but this is not likely. If you are a landlord and wish to discuss your options moving forward then contact us for a no obligation chat.

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