Support, Advice and Experience within the Property Market

Rental Shortage Must be Addressed

From Robert Ulph on February 14, 2020

I have written numerous times about the increasing legislation being imposed on the private rented sector and the impact this is having on the landlords, who own maybe one or two properties and on whom the market relies. We are seeing even long-term landlords selling up and exiting the sector and the implications of this are something the Government must address to secure housing needs in this country.

ARLA Propertymark reveal in their latest research that nearly half a million properties could be affected by movement to the short-term letting market. In their report ‘Impact of Short Term Lets’ they uncover that more landlords are exiting the PRS and are moving into lettings offered through rental portals like Airbnb. Airbnb offers overnight, weekend or holiday accommodation, but they don’t own the property as everything they advertise is privately owned.

ARLA Propertymark’s report reveals 16% of owners have let out all, or part, of their property at least once in the last two years – this suggests 4.5 million properties, the equivalent of 19% of the UK’s housing stock, have been used for short-term lets. The findings also show 16% of landlords said they only offer short-term tenancies and of those landlords who currently offer short-term lets, 38% state they do so because of the growing burden of regulations facing the private rented sector.

However, it is the insight into the future that is particularly revealing. One in 10 landlords are likely to consider a switch to short-term lets, which will have a significant impact on the country’s already stretched housing supply. Landlords with more than five properties in their portfolio are considerably more likely to reduce their offering of long-term lets and replace with the short-term letting model.

Based on the number of landlords considering a move to short-term lets, up to 230,000 properties could be left unavailable for tenants if landlords who said they were ‘very likely’ to move to offering short-term lets were to do so. If this included landlords who stated they were ‘fairly likely’ to make the move, the number of properties rises to 470,000, which is a huge concern for tenants reliant on the private rented sector.

There has to be change as ultimately it will be tenants who will suffer due to a fall in the number of properties available for long-term rent – if supply of rental property continues to fall, a rise in rent costs will be inevitable.

“The growth in short-term lets is particularly concerning for the traditional private rented sector,” states David Cox, ARLA Propertymark Chief Executive. “As landlords are continuously faced with increased levels of legislation, it’s no surprise they are considering short-term lets as a chance to escape this. Unless the sector is made more attractive, landlords will continue to exit the market resulting in less available properties and increased rent costs.”

As always, if you have any questions on these issues or anything in the local property market, please call me.