Councils warn of housing shortage thanks to landlord sell-offs and Airbnb

There’s a growing crisis in the private rented sector due to the lack of suitable properties available, according to councils up and down the country.

The District Councils Network, a network of 183 councils across England, warned that a sharp rise in landlords selling up or converting their homes into Airbnbs is creating a big problem.

Some three quarters (76%) of councils said there’s been a rise in housing waiting lists, causing more people to lose homes and making it harder to find permanent accommodation for those in need.

Half (48%) of these councils said they were now experiencing a significant pressure on housing services as a result.

As a result they called for the government to invest in more council housebuilding and raise the benefit cap.

Cllr Sam Chapman-Allen, chair of the District Councils Network, said: “This survey reveals a perfect storm of problems creating a crisis in the private rented sector across the country.

“Now the government’s Eviction Ban has ended, this is a problem that could get worse, with councils also seeing increase in the numbers of tenants needing housing support due to increased evictions due to rent arrears.

“During the pandemic, district councils and the government worked together to help protect those who are most vulnerable through the Everyone In initiative, the temporary banning of no-fault evictions, and other measures such as furlough and the Universal Credit uplift.

“We need to urgently tackle this issue by permanently lifting housing benefit for tenants in private rented housing and for increase in government support to invest in a renaissance of council house building to create homes, jobs and growth.”

Shortages are particularly bad in councils areas popular with tourists, with landlords switching their properties to more profitable short term holiday lets.

One council in a popular tourist destination in the south-west of England has reported a nearly 80% drop in the number of open market, long-term rental accommodation available in their local authority area over the last three years, with many landlords leaving the market or providing short term accommodation for holiday makers instead.

Rents in the private rented sector have reached a thirteen year high according to Zoopla, rising by 6% year-on-year.

Councils are reporting that this rise is forcing some long term tenants to apply for hardship support from their local authority, with some council areas seeing rents rise to over a third higher than the average salary in their local area.

Councils warned that the housing benefit many receive will not be sufficient in the longer term, as the government looks set to keep Local Housing Allowance rates, which determines the amount of benefit received, frozen over the next year.

According to the report some landlords are leaving the market due to the impact of the pandemic, with tenants unable to afford their rents. Meanwhile landlords are moving into properties themselves.

The District Councils Network wants the government to give councils the tools to create their own permanent housing for people in their communities in hardship.

District councils said they stand ready to work with government to proactively increase the supply and quality of homes for benefit claimants, ensuring those in need can have a permanent roof over their heads in their local communities in the future.

Eleanor Bateman, policy offficer for Propertymark, said: “Concerns over a shrinking private rented sector is not a new conversation, but it is one that is not being acknowledged.

“If the situation continues to be ignored by decision makers fixated on taking a piecemeal approach to legislation we shouldn’t be surprised if the number of people on housing waiting lists skyrocket.

“With the removal of Section 21 on the table, unrealistic energy efficiency targets, and the attraction of short-term letting, the UK government will find that the private rented sector continues to diminish, and homelessness will rise. The sector needs high standards and regulation, but it must work for both landlords and tenants.

“As we await their Renters’ Reform White Paper, it’s imperative the UK government recognises that the balance has swayed too far. There are too few incentives for investors in the private rented sector, and regulatory and tax levers must be reviewed to avoid unintended consequences.”

Comments 6

  1. The worst is yet to come when abolition of S21 kicks in tenants will be kicked out all the thanks go to Shelter and Gerenation Rant who have pushed for these changes in their power struggle to control other people’s investments. Our overly thick politcians see these changes as vote winners from tenants. It is a fact that, in the vast majority of cases, landlords DO NOT WANT TO LOOSE TENANTS who maintain their side of the renting agreement, landlords invest for the income. They do not jump to change tenants for the fun of it to face extra letting fees, administraion costs, void periods etc but our very thick politicians are too busy breaking their own covid rules and partying to understand. Most landlords do not object to improvements in safety standards and many have been ahead of the curve in these matters. The problems are in the bottom end of the market where social housing & council housing should be meeting the needds where tenants can’t afford the open market rents. Those who need social housing, of which there are many, due to poor wages from inappriopriate immigration (driving down salaries by over supply of labour) are the ones most likely to fall behind in their rent, are forced to into poorer property where rents are low and maintenance standards are poorer due to the economics. These are the tenants Shelter and Generation Rant are mainly dealing with. The illegal immigrants and those in the black economy, those in modern day slavery etc are the fodder of the criminal landlords. The blighting of good landlords with terms such as “Rogue Landlords” does nothing to help matters and unfairly treats the decent rental market. MP’s do not listen as all their efforts go into following the party line using the political terms of the day – such as levelling up!!! Rant of the day? maybe but these are the facts so called charities and Government just do not want to believe as they do not have the solutions where they can pass on the costs to others.

  2. I agree with Will 2. Many landlords without legal expertise and the ability to keep on top of a mass of regulations are getting out of the sector. This exodus is not caused by but is exacerbated by the pandemic and the eviction moratorium. Even before that, any landlord who was fined one to three times the amount of the deposit for a mistake in paperwork may have thought twice about continuing. If your profit for two years can be wiped out because one rather than two directors signed the Prescribed Information Form, even though the deposit was lodged with a deposit scheme, and even after it has been returned in full, you may think the law is against you. I could give other examples of draconian rules. Contrast that with the attitude of the police and other authorities when tenants trash a house and scarper leaving tens of thousands of pound of arrears and property damage.

    Shelter, Generation Rent et al have succeeded in driving private landlords out. Now they see the results of their labours but double down. Next will be a demand for rent controls and a fresh moratorium on evictions. Never once will they say to Government: “How can you ensure the people who provide desperately-needed accommodation get paid so that they continue to house those who would otherwise be homeless?”

    People talk about law of unintended consequences and may now say that the housing shortage is an unintended consequence of the oppressive anti-landlord legislation of the last few years. However, in law a person is presumed to intend the natural consequence of his actions. Suppose you know that by getting up to go to the bathroom, the baby will wake and start crying. Even though you may not wish it, if you go to the bathroom you intend the baby to wake.

    So members of Parliament and Shelter, Generation Rent and others, I say by your actions you intended the housing shortage and you should be ashamed of yourselves.

  3. Shelter and Generation Rent seem to have the ear of the Government even though they have never housed anybody and have no idea of the trials and tribulations that it can involve from a landlord perspective. The NRLA who are supposed to represent landlords appear to have no influence whatsoever. All they seem to do is tell us we must “delight” our tenants, lag our pipes and clear our gutters every winter and try to sell us things, while apparently just rolling over and accepting every new regulation that comes along. That’s why I let my membership lax.
    There seems to be a vested interest in demonising landlords, we are right up there with estate agents and politicians. Peter Rachman died in 1962 but people like Shelter, Generation Rent and even the Government still assume he is a role model and like him, Landlords are assumed to be rich and exploitative so can easily afford to suck up the cost of rent arrears and property damage and itv serves them right.
    Faced with ever increasing regulation it is no wonder that existing landlords will seriously consider selling up, especially when a property becomes naturally vacant so they can avoid being potentially stuck with rent controlled, non-evictable tenants, and bills for thousands of pounds of work to meet new EPC/ boiler regulations and whatever else the Government manage to dream up under the influence of Shelter and Generation Rent.
    Even if Landlords do sell up if Generation Rent get their way, they will have to compensate the tenants and pay them £1,700 moving expenses. There might be a slight drop in house prices as a result of landlords selling up but not to the extent where most tenants could actually afford to buy the house they used to live in, so, they will be homeless or at the mercy of the rogue landlords who just ignore regulations and house people in over-crowded dumps safe in the knowledge that they won’t be caught. Cowed tenants don’t complain and Councils don’t try that hard to investigate as the result of closing these people down would overwhelm a social housing system that already can’t cope. Never mind, perhaps Shelter will reduce their fat cat salaries and use some of their £70M+ income to help the homeless out.

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