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Rent controls would send landlords fleeing – new report
A new report into rent controls found that a number of landlords would sell all or some of their properties immediately.
A number of others would gradually reduce their portfolios.
The research asked 174 London landlords how they would respond to a range of possible rent control scenarios.
These were:
- Rents for existing tenants increasing in line with annual inflation (currently 0.3%)
- Rents on all properties, including lets to new tenants, only increasing in line with inflation
- All rents frozen for three years
- All rents reduced to two-thirds of current levels, and thereafter rising only in line with inflation.
In each scenario, some landlords said they would make a loss.
In scenario one, just under 60% of landlords said they would carry on as they are, with over 40% looking for an exit. In the least popular fourth scenario, only about 15% said they would continue as at present, with the remainder seeking to get out.
The second least popular scenario was a three-year freeze on rents.
The research noted that if there was a forced reduction in rents, as in scenario four, there would be a housing market “shock”.
Interestingly, the research also found that 39% of landlords made a deliberate decision to buy rental properties using mortgages – suggesting that almost double the number of landlords will be affected by the forthcoming tax crackdown announced in the Summer Budget.
The Treasury insists that only 20% of landlords will be affected.
The new research also suggests that a surprising percentage of London landlords fall into the accidental category – altogether 29%.
The research, by the Cambridge Centre for Housing and Planning Research, for the London Assembly, can be found here
http://www.propertyindustryeye.com/rent-controls-would-send-landlords-fleeing-new-report/
