The Housing White Paper 2017 – what landlords need to know
In February of this year, the government issued its new White Paper on housing. It took the opportunity to say that the housing market was ‘broken’, and it pointed the finger at landlords. That seems a little bit much to us, but let’s take a look at what the White Paper means for landlords.
The White Paper does say that it wants to provide landlords with a fairer deal, but there is no detail on how that might be done.
A move to long-term rental?
The government says that the sort of short-term tenancy under which a tenant has the right to stay in a home for only six months to a year is responsible for family difficulties. For example, when children have to move to a new school because their previous tenancy has ended and they can’t find a new one in the school’s catchment area. Measures are therefore proposed that will encourage three-year tenancies. We would call that a good move, but as the proposals are currently set out, for existing housing, it would affect only housing associations and institutional investors. There is also talk of working with the National Housing Federation and the British Property Federation on encouraging longer term rentals in build-to-rent. It is difficult to see much here for the private landlord to get excited about since the White Paper restricts itself on any comments about the wider private rental sector to saying that it will ‘consider’ what more can be done to give families greater security of tenure.
The government says consultation will begin early in 2017 on legislation to ban fees being charged by agents to tenants. This is by no means a new proposal; while it may appear to have no significance for landlords, being a matter for agents and tenants only, the most likely result will be an increase in rents.
Last year saw the passing of the Housing and Planning Act 2016, which contained a series of measures, not as yet implemented, to improve standards in the rented housing sector. The White Paper adds nothing to the debate, simply saying that the measures will be implemented at some point.
Build to rent
The White Paper says the government is consulting on measures that will encourage more build-to-rent developments, including telling local authorities to plan for build-to-rent ‘where there is a need’ and ‘making it easier’ for build-to-rent developers to be able to substitute ‘affordable rental’ for affordable purchase.
The rest of the White Paper has little to do with renting and is mostly about encouraging the construction of more homes in places where they are needed. We will always wish to support government in its efforts to improve living conditions for all citizens, including landlords and tenants, but it is difficult to see in this White Paper anything more than a government that knew it had to say something – and so said something. Landlords, seeing the lack of any hard content in the White Paper, will be more focused on such matters as the change in tax relief on mortgage interest.
We are sorry to have given here what must appear to be a negative appraisal of government moves. The end result may be a rental market that is more difficult, and not easier, to navigate a profitable way through. If you want to protect your property investment interests, get in touch today.