Landlords are selling up for many reasons, including loss of rental income, or personal hardship due to job loss. Privately rented houses are being listed for sale and selling to the purchaser offering the highest sales price. So where does this leave the tenants?
Struggling to find somewhere to live and now in the UK and other countries, there is a severe shortage of affordable rental accommodation.
The housing crisis preexists the pandemic, and Brexit and failure to solve it has created a worrying trend globally.
Governments keen to be seen taking action have come down hard on Landlords, a strategy that has exacerbated homelessness and created a more significant divide between the rich and poor.
However, there is a glimmer of light shining with the call for a £1.3billion fund that when spent strategically will provide solutions to the UK’s housing crisis.
Lord Best, Chairman of the Affordable Housing Commission, says the fund can work with existing landlords to fund up ‘social’ landlords and community-led housing groups to purchase private rental properties for sale.
Another area the fund can support is renovating run-down vacant properties, so they become part of available housing stock. Plus in England there are property developments that have stalled, they too could benefit from the fund to get back to life with a new exit strategy that helps those most in need for a home to call their own.
The Affordable Housing Commission’s new report on “A National Housing Conversion Fund” can breathe life into a depressed housing market. In many ways, it’s a combination of strategies that have been regurgitated in housing markets, albeit with private funds not public money for many years.
Private Investor Activities
The renovating of unliveable flats, and houses to rent out or for sell is a popular investment strategy.
In Britain, America, Australia, Canada, New Zealand, and parts of Asia and Europe, TV reality shows have spurred on the activity too.
However, where there’s money being made tax is sure to follow. The renovating to rent or sell strategy has been targeted with tax grabs. Less profit in the activity has hampered the desire to ‘recycle’ housing stock.
Plus ‘buy and hold’ property investors which are mostly ‘mums and dads’ with one or rental homes, have been hit with stricter tax rules and property compliance requirements. Tenancy agreements have been tweaked to favour tenants, so the whole business of owning investment properties to earn a profit has lost its shine.
It is time to get serious with social housing supply, so why not help existing landlords to sell their private properties to purchasers with a social housing mandate?
A National Housing Conversion Fund
Here is an opportunity for the British Government to be part of something that will deliver lasting positive outcomes. The report examines how the £1.3billion should be spent, including:
- 42,500 new social and affordable homes in high demand areas like Midlands and the North at social rents
- Provide a much-needed boost to the economy now and also ongoing over the next 30 years estimated value of £1.4billion
- Help struggling homeowners meet home loan repayments
- Improve the quality of rental housing stock and focus on increasing supply
- Jobs for around 9,300
Maybe it’s time for other nations to take a leaf out of the UK’s book! Study this report, research where it can be rolled out and make it bipartisan, so a change in Government doesn’t annul or revoke it.
How refreshing it is to read a report that presents solutions to fix a housing crisis that could become another pandemic. The damage has been done, and it’s too late to appeal to many exiting landlords. Rather than burying your head in the sand and ignoring the predicament, the focus should be on better outcomes for what happens next to meet housing challenges.