Dorian Gonsalves, CEO of Belvoir, warns that government interference in the rental sector is likely to result in a rise in rents throughout 2018 and into 2019.
Dorian had this to say: “As 2018 progresses, landlords and tenants will find themselves shouldered with an extra burden of cost due to continued government interference in the rental market, which includes a decision to ban tenant fees and the implementation of punitive tax changes.
Belvoir’s Q3 rental index revealed that, on average, rents increased by just £3 a month compared to the same period last year, which demonstrates that the rental market is working well for most landlords and tenants across the country. However, as a consequence of the impact of government policies we believe that during 2018 many landlords will inevitably be forced to review rents across their entire portfolio. This is a real shame, as in our experience many landlords have resisted increasing rents when they have a tenant in situ, but this is likely to change during 2018 and 2019 when the impact of some of the government’s policies become more apparent.
We have not seen evidence of smaller landlords choosing to exit the sector. With all the uncertainty surrounding Brexit, we believe that property remains a simple, unsophisticated and reliable investment for over two million UK landlords. We are, however, noticing that those new landlords who are entering the sector, are doing so with lower borrowing, and they are looking for a stronger return on their cash. To many of the UK’s smaller investors, property represents a relatively strong investment, and more importantly, it is an asset that they can touch, see and pass on to family members in the future. We predict that this is unlikely to change for a very long time.”