Landlords sell to avoid property licences
Landlords with houses in multi-occupation (HMO) are selling up to avoid the new licensing arrangements introduced by the UK Government in April 2006. Almost one third of letting agents report that landlords have sold their properties, while 15 percent report that landlords are changing the structure of their buildings, says RICS research published today.
In England, sales are most evident in the southern regions, with 24% of agents reporting landlords exiting the market in the Eastern region and London, while in the South East the figure was 22 percent.
Of the 15 percent of agents reporting that landlords are changing existing properties to overcome rules on HMOs, many have reported landlords are no longer letting property to more than three tenants.
Students have been the most affected group, identified by 42 percent of agents in most regions of the country. However, in the Eastern region migrants were the hardest hit group.
21 percent of Chartered Surveyor letting agents have noted a reduction in the supply of affordable housing as landlords have exited the HMO sector. However, the impact on rental levels has been muted with 85 percent of agents reporting no change at all. The largest impact reported was in London although rental rises have been moderate.
Jeremy Leaf, RICS spokesperson said:
“The decrease in houses with multi-occupation will help to cut down on rogue landlords but will cause problems by reducing the number of properties available as landlords decide to withdraw from the sector, so creating an additional burden on the state to house the most vulnerable tenants.
“The student and immigrant population may be hit hard as accommodation becomes less accessible in university towns and urban areas. Rising fees and rising rents mean the days of ‘Young Ones’ style student housing could be over with more students opting to study near the parental home rather than follow the traditional route.”
Brian Berry, Rics head of policy said, "'a higher tax burden on smaller developers along with funding shortfalls for necessary infrastructure for larger schemes, such as the Thames Gateway, will reduce the amount of proposed housing development, doing little to resolve the huge problem of housing affordability for first-time buyers.'
Royal Institute of Chartered Surveyors 25 September 2006
Submitted by Martin Slavin on Thu, 28/09/2006 - 12:24.