The Royal Institution of Chartered Surveyors (RICS) views the exit of small landlords from the private rented sector as the most outstanding feature of the current housing market. They see this as being largely a consequence of tax changes, whereby landlords pay an additional 3% stamp duty and have less tax relief on mortgage interest. Their forecast is that rising tenant demand along with a fall in supply will lead to more rent rises. Supply is being affected by the withdrawal of landlords from the PRS (for the reason mentioned) as well as the government’s failure to stimulate the corporate build to rent market. RICS supports the new regulations aimed at improving tenant experience but feels the government needs to urgently look again at the PRS as whole and this includes finding ways of encouraging good landlords. If the government wishes to move away from the PRS it needs to provide a suitable alternative.
The Government response via the Treasury indicated that it wants more houses on the market for first time buyers and the tax changes are part of this strategy. The Shadow Housing Secretary, John Healey, said that Labour would address the problems faced by renters with “bold new rights” for tenants including ending no-fault evictions and introducing rent control.
There is a more detailed discussion of the RICS report and responses to the report on the BBC website.
The original RICS survey conclusions can be read here.