November 18, 2019   |   Jack Taylor

Government Policy Hurts Residential Lettings Market

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The Royal Institute of Chartered Surveyors (RICS) has criticised government policy claiming, “regulatory changes have decreased stability and standards” within the residential lettings sector.

In a market research report conducted by Mintel in November 2018 the residential lettings market is described as “characterised by uncertainty, especially surrounding Brexit” and the in the 12 months since then the situation has far from improved.

RICS Policy Manager Tamara Hooper issued a stern rebuke to the government accusing it of “persistent meddling” which has resulted in decreased investment from the supply side and more landlords are getting out of the sector all together.

Examples of government ‘meddling’, some of which have been discussed before on the Petty Real news page, include:

  • Changes to the rights of landlords under section 21
  • Lack of clarity over stamp duty reform
  • Uncertainty over future Brexit deal
  • Upcoming general election

Last month’s UK Residential Market Survey, published by the Royal Institute of Chartered Surveyors (available here in full) makes for fascinating reading. Opinions and comments from industry experts cited in this document universally condemn the government’s apparent lack of a clear strategy and loss of clarity resulting from inconsistent messages being sent to the market.

Richard Graves, a Fellow of the Royal Institute of Chartered Surveyors commented, “until we have a working parliament and an end to the uncertainty, I do not see things picking up.”

His sentiments are repeated from all parts of the country. Another comment reads: “the farce associated with the political uncertainty and selfish behaviour compounds confusion in the marketplace, this makes both sellers and buyers nervous over the future.”

The RICS report merely confirms what many already suspected. The figures on tenant demand show an acceleration in growth in the three months to October, while at the same time new landlord instructions slipped once again with the pace of decline seemingly gathering momentum. Given the existing problems in the housing market, this is bad news indeed.

If the government wants to restore some element of stability to the market it will need to ensure both tenants and landlords are protected, and this means providing balance between landlord and tenant rights.

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