Proposed Changes To Rental Market Will Benefit Landlords

February 22, 2023

The government has been looking into ways to reform the rental market, resulting in a new report by the Levelling Up, Housing and Communities Select Committee. This is Money reports that the changes will benefit landlords with a fairer tax system and a faster repossession process. 

The UK has a serious undersupply of rental homes, which has driven up rental prices in the past year by an average of 4.4%, according to the latest data from the Office for National Statistics (ONS). The situation is particularly bad in London, where rents are on average 11.5% higher than this time last year.

The situation has been made worse by the fact that more landlords than usual have pulled out of the rental market in recent years, because of changes to tax rules and tougher energy efficiency regulations. However, the new report recommends that the tax laws are reviewed to make them more favourable and attract landlords back to the market. 

Chris Norris, of the National Residential Landlords Association, said: ‘We warmly welcome much of the report. The NRLA has never been against reform of the sector, but it has to be fair and workable for both tenants and landlords.’

He added: ‘That is why the committee is right to call for court reform to underpin the ending of Section 21, changes in plans for student tenancies and ensuring cases of anti-social behaviour are prioritised by the courts.’

‘As the committee rightly notes, the biggest challenge faced by many renters is that there are not enough homes to rent. All the protections in the world will mean nothing for tenants if the homes are not there in the first place. That’s why the Government should accept the call for a full review of the impact of recent tax changes in the sector.’

The committee of MPs have also recommended that the court system is overhauled to make it easier to evict problem tenants, which can currently take months, even if there is clear evidence of anti-social behaviour. The new system would see the establishment of dedicated fast-acting courts to ensure that nuisance tenants are evicted swiftly. 

Marylen Edwards, of landlord mortgage lender MT Finance, told This is Money: ‘The private rental market continues to be hugely important. Interest rate rises mean renting is still a necessity for many would-be first-time buyers, who are hindered in getting mortgages due to the rising cost of living.’

She added: ‘Cities across the UK are almost back to fully functional ecosystems, and the rental market continues to thrive in these locations. Anything that supports landlords and provides clarity to the market is welcome.’

Prospective buy-to-let landlords may feel more confident about entering the market once the new proposals have been approved. The current imbalance between supply and demand in the rental market means that a rental property in a prime location is likely to yield a very good return on investment. 

If you are looking for advice about a buy to let mortgage with poor credit, please get in touch today

Your home may be repossessed if you do not keep up with your mortgage repayments.

Back to Blog
;window._klOnsite = window._klOnsite || []; window._klOnsite.push(['openForm', 'R6NsLH']);