We are committed to influencing policy and Government to ensure the private rented sector works effectively. We've highlighted the challenges faced by landlords and six key actions which could be taken by Government to deliver a thriving private rented sector.
The UK's private rented sector, housing 4.6 million households1, has steadily grown since the early 2000s with the arrival of buy to let mortgages. Low interest rates have enabled this growth, encouraging many to invest in rental properties for income or pensions. Despite increased regulatory and tax changes for landlords, manageable costs have persisted due to low borrowing rates.
The period of rapidly increasing interest rates following the mini-budget has put pressure on landlords who in many cases will have seen their borrowing costs increase significantly.
This sector offers flexibility, supporting various economic needs and diverse demographics. It also plays a vital role alongside owner-occupation and social housing, providing unique benefits. Government initiatives should support both landlords and first-time buyers without pitting them against each other.
Landlords may respond to policy changes by adjusting rents or reducing expenses. However, these kinds of shifts may limit tenant choices, increase rents, and lead to poorer property upkeep.
It will be the most vulnerable tenants who are impacted most by these changes, particularly if they are not accompanied by an increase in social housing.
The Mortgage Works supports current legislative proposals like the Renters (Reform) Bill, focusing on enhancing standards, tenancies, and landlord registration. However, sustained efforts are needed beyond these reforms to ensure the sector thrives. Neglecting these areas could prompt further landlord exits, potentially weakening the market and driving up rents.